Wetherspoons set to increase food prices at its Doncaster pubs
Wetherspoon has warned the price of food across its pubs will increase by around 40p when a recent reduction in the VAT on its food is phased out later this year.
Tim Martin, chairman and founder of Wetherspoon, said: “The company continues to expect to make a loss for the year ending July 25.
“In a trading update of January 19, the company’s principal ‘scenario’ estimated sales in the financial year starting July 26 to be in line with financial year 2019, which remains our current best estimate, on the basis that restrictions are ended, as the Government currently intends.”
The pub group which runs The Gate House in Priory Walk, Red Lion in the Market Place, The Running Horse at Doncaster Sheffield Airport and Old Market Hall, Mexborough, said it expects to tumble to a loss for the current financial year after reporting a decline in sales against pre-pandemic levels.
The company said like-for-like sales from May 17, when hospitality venues were able to reopen indoors, to July 4 declined by 14.6 per cent against the same period in 2019.
It added; "The chancellor reduced VAT on food for the hospitality industry to five per cent last year, still above the rate paid by supermarkets, which was nonetheless welcome. However, it is now proposed that VAT returns to 20 per cent, in stages, in the next year.
“The interim rise to VAT of 12.5 per cent, in September 2021, will result in Wetherspoon having to increase food prices by around 40 pence per meal. The VAT rise will make the entire hospitality industry less competitive vis a vis powerful supermarkets.”