Wetherspoon sales approach £1bn

PUBS group JD Wetherspoon has seen sales hit almost £1 billion - more than 1,200 times revenues during its first year of trading in 1984 - as it benefited from expansion of the estate and earlier opening hours.

Its strategy has helped the group see off the worst effects of lingering consumer caution and continued tough times in the pub sector. Although like-for-like sales of both food and drink dipped during the year to 25 July, overall revenues rose 4.3 per cent to just over 996 million.

Pre-tax profits, after stripping out write-downs of 10.6m on the value of certain pub assets, were 7.3 per cent higher at 71m.

Keith Down, finance director, said the decline in like-for-like sales reflected the continued difficult trading climate brought about by broader economic uncertainty. He added that though the growth figures were "not spectacular", they did show steady progress.

Down also highlighted a marked improvement in trading towards the end of the financial year. That continued in the six weeks to September, when like-for-like sales rose by 1.5 per cent.

Since April, more than 90 per cent of Wetherspoon's pubs have been opening at 7am, offering customers coffee and breakfast. The move to begin service two hours earlier has been a significant factor in the group's recent sales renaissance.

"It is certainly an important contribution, but we have also seen an improvement in food sales generally," Down said.

Wetherspoon now sells more than a million breakfasts and coffees per week, putting its second only to McDonalds for morning meals. In terms of java, it ranks third after Starbucks and Costa Coffee.

Down said the looming VAT increase and public sector cuts made for an uncertain outlook across the sector, which has been badly hit by reticent consumer spending, hikes in duty, cut-price supermarket competition and the smoking ban. He vowed that Wetherspoon would continue to innovate to drive sales, though forthcoming changes will likely be less dramatic than the widely heralded extension of opening hours.

"Obviously we will be looking to do whatever we can to continue moving forward over the next year or two while the economic situation remains tough," Down said.

That will include another 250 pubs over five years. A total of 47 opened during the year, taking the group's estate to 775.

"There are lots of opportunities out there for us, and a lot of those will be in Scotland," Down said.

The group's first Scottish pubs were concentrated in Aberdeen, Dundee, Edinburgh and Glasgow, but it is now looking to expand its geographic reach.

It is examining potential sites in locations such as Hawick, Orkney, Stirling and Thurso, while strengthening its representation in larger markets. Openings in the coming months are planned for East Kilbride, Edinburgh, Glasgow and Livingston.