Wetherspoon's prices predicted to soar amid crippling cost of living crisis
Customers are to anticipate inflated prices on their next visit
Prices at popular pub giant, JD Wetherspoon could soar this year, in a bid to battle increasing labour, food and energy costs.
Analysts believe prices at the beloved British pub chain will remain lower than its competitors, despite increasing above its favoured cheap and cheerful deals.
The pub company is antiticpated to report a 3 percent drop in sales in three months to the end of June, in its fourth quarter trading update on Wednesday.
The chain would need to see sales hit double-digit growth to return to 2019 profits and offset higher staff, food, drink and energy costs.
In May this year, inflation rates in the UK skyrocketed to 9.1 percent, with many pubs, cafes and restaurants forced to raise prices in order to stay afloat.
Wetherspoon's added 10p to the price of its drinks in March and food prices were raised in April when VAT – initially cut during the pandemic – returned to 20 percent.
The pub chain is favoured by revellers who are increasingly opting for cheaper nights out as the cost-of-living crisis bites.
Bosses at the firm confirmed in May they "expected to "break even" this year as the pub firm returned to profit in the third quarter of the year.
They remained optimistic about a gradual and steady improvement in the final quarter.
Despite the hopeful outlook, analysts suggest the chain’s older clientele are more risk-averse and therefore more likely to be affected by the economic downturn.
Matt Britzman, an equity analyst at Hargreaves Lansdown, said: “With restrictions now firmly in the rear-view mirror, Wetherspoon’s been able to improve sales, albeit slowly.
“Like-for-like sales in the last couple of weeks of the third quarter were slightly positive.
“The main story will likely focus on inflation, and the group has raised prices already this year to battle rising costs. In March, cautious consumers hadn’t impacted trading.
“Given the cost-of-living crisis has evolved since then, it’ll be interesting to hear whether that trend has shifted at all.”
Yesterday the former Conservative minister Alun Cairns urged the Treasury to further axe duty rate son draught beer to support pubs that are facing significant spending pressures.
A recent study by Altus Group revealed that there are fewer pubs in England and Wales than ever before as 7,000 disappeared from communities in the last decade.
Pub groups are intensifying their appeal to the Government for greater relief to ease the mounting pressures.