Wetherspoon Steers Clear of Job Cuts Despite Rising Costs
By Raechel Thankam Job
(Reuters) -J D Wetherspoon does not plan to slow down hiring or cut jobs despite rising costs in Britain and will "try and improve every area of the business", the pub group's chairman said on Friday.
Wetherspoon reported a jump in interim profit on sustained demand for drinks and food, driven partly by rising disposable incomes among younger consumers, and the return of older ones to pubs after they were slow to step out post the pandemic.
However, rising labour costs and wavering consumer sentiment could dampen prospects for the year ahead.
WHY IT'S IMPORTANT
The Labour government's budget in October, which raised taxes and worker costs for employers, has fuelled fears of price rises or job cuts by companies to counter the higher expenses, hampering consumer spending.
Still, pub groups such as Wetherspoon enjoyed higher footfall, especially over the festive period included in the company's results for the six months ended January 26.
KEY QUOTE
"We're investing heavily in air conditioning, staff rooms and improved draught beer dispense systems, for example," Chairman Tim Martin told Reuters.
He added that while the focus was on improving existing pubs, Wetherspoon could add a dozen new sites each year.
BY THE NUMBERS
The company reported interim adjusted pre-tax profit of 41.2 million pounds ($53 million), up 58.2% from a year earlier.
Wetherspoon reiterated it expects the hikes to wages and national security contributions to add about 60 million pounds per year to costs. The company employs about 42,000 workers.
MARKET REACTION
Wetherspoon's shares fell more than 10% by 1300 GMT.
"There are clearly signs of further progress for Wetherspoon, but a weaker wider market and the moribund outlook for the UK economy have brushed any positives aside," interactive investor analysts said.
($1 = 0.7728 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Varun H K and Krishna Chandra Eluri)
