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Wed 9th Jul 2014 - Breaking News - JDW reports sales slowdown, plans to close earlier
JDW reports sales slowdown, plans to close earlier: JD Wetherspoon has reported like-for-like sales of 4.9% in the ten weeks to 6 July 2014, with total sales up by 10.3%. It also intends to pull back openings hours from 1am to midnight at most pubs in areas where a late-night levy is to be introduced. In the year to date (49 weeks to 6 July 2014), like-for-like sales increased by 5.4%, and total sales increased by 9.8%. Sales have been slightly weaker during the World Cup. The operating margin, in the ten weeks to 6 July 2014, was 8.1%, in line with 8.1% year-to-date (49 weeks to 6 July 2014) – and the full year is now expected to be around this level. In the next financial year, the company expects the operating margin to be in the region of 7.7% to 8.1%, subject to the level of like-for-like sales, the number of new openings and cost pressures. The company has opened 40 new pubs and closed five since the start of the financial year. It has eight sites under development and, in line with its last update, intends to open around 45 pubs in the current financial year. It plans to open around 30-40 pubs in the following financial year. The company has bought back 2,278,108 shares, at a total cost of £18.5 million, since the start of the financial year. The company stated: “The major threat to the pub industry, as previously indicated, is the tax inequality between pubs and supermarkets, especially in respect of VAT and business rates. This inequality has less effect in more affluent parts of the country, as illustrated in frequent comments from pub companies and analysts about regional trading patterns, but is the main factor in pubs’ closures in swathes of northern England, Scotland and south Wales, for example. A growing political realisation of the impact of the 10,000 pub closures in the last decade on high streets, employment, government revenues and community life has helped to reduce or reverse some harmful aspects of recent onerous legislation. However, the impact of the coalition government’s ‘late night levy’ is starting to take effect, with annual charges of up to about £4,000 per annum for pubs opening beyond midnight in Newcastle and Islington, for example. Wetherspoon has decided to reduce opening hours from the current 1am to midnight on Fridays and Saturdays, at most of our affected pubs, as and when the levy is introduced or renewed – a retrograde step for pubs, which will have a positive impact on supermarkets, since they will benefit from earlier pub closures. Although sales have slowed in recent weeks, the company remains confident of a reasonable outcome in the current financial year.” 
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