Wetherspoons calls for pub food tax cuts ahead of Budget cost increases
It came as the hospitality giant revealed stronger sales for the half-year so far despite selling off more venues.
The boss of JD Wetherspoon has called on Prime Minister Sir Keir Starmer to cut pub food taxes ahead of a jump in costs linked to the Budget.
It came as the hospitality giant revealed stronger sales for the half-year so far despite selling off more pub venues.
Chairman Tim Martin said the company is set to face a £60 million jump in labour-related costs in April, amid increases in employers’ national insurance contributions and the minimum wage.
He said the business is in a “reasonable” position but that forecasting is “difficult” in the face of impending tax and wage increases.
As a result, he renewed calls to equalise the VAT paid on food by pub and restaurant businesses with that of supermarkets.
Most food and drink in shops has zero VAT whereas restaurants and pubs have a standard rate of 20%.
“This tax advantage allows supermarkets to subsidise the price of beer they sell,” Mr Martin said.
“The VAT distortions that exist today will inevitably create more supermarkets and less pubs.
“Wetherspoon therefore calls upon Sir Keir Starmer to redress this imbalance, thereby striking a blow for tax equality and ending discrimination in favour of dull dinner parties.”
It came as the pub company reported higher sales over recent months.
It said like-for-like sales rose by 5.1% over the 25 weeks to January 19 compared with a year earlier.
It said rising food sales were a key driver, increasing by 5.6% year on year, while bar sales were up 4.5%.
This helped to offset a 6.5% slump in the sale of its hotel rooms.
Wetherspoons also highlighted that sales accelerated around Christmas, with a 6.1% increase over the three weeks from December 16 to January 5.
However, this was weaker growth than reported by pub rivals such as Marston’s and Young’s over the festive period.
Wetherspoons currently runs an estate of 796 pubs after selling six sites over the past year, while it has opened two new venues.
Julie Palmer, partner at Begbies Traynor, said: “After an impressive performance for most of 2024, it seems the mood music has changed at JD Wetherspoon, as it delivered a lacklustre Christmas performance that lagged behind peers and highlights a greater sense of uncertainty as we enter 2025.”
