Living wage could be a bitter blow, Wetherspoon’s boss Tim Martin warnsComments Off on Living wage could be a bitter blow, Wetherspoon’s boss Tim Martin warns
“The recent government announcement regarding the ‘living wage’ adds considerable uncertainty to future financial projections in the pub industry,” said Martin.
“The average price of a pint in a supermarket is less than £1 and we estimate staff costs to be around 10% or 10 pence.
“In contrast, a pint in a pub costs around £3 and staff costs are about 25% or 75 pence. Increased labour costs therefore affect pubs with far greater force than supermarkets.”
Martin was speaking as Wetherspoons reported that sales grew by 2.9% on a like-for-like basis in the past 11 weeks and that profit margins were down from 8.3% to 7% in the past year.
The business had already indicated that full-year profits for the year about to end would not be higher than the previous one’s.
But the shares still fell 37p, or 4.8% to 734p.