Shares in the FTSE 250 firm slumped in morning trading after it warned on profits, blaming higher energy, wage and business rates costs
JD Wetherspoon boss Tim Martin (Image: Coventry Telegraph)
Wetherspoon shares tumbled on Wednesday after the pub giant revealed the financial impact from November’s tax-hiking Budget.
The FTSE 250 company said cost increases across energy, wages, repairs and business rates had inflated expenses by £45m in the 25 weeks to mid-January. This suggests an annual cost surge of up to £94m.
The firm, amongst Britain’s largest pub operators with nearly 800 locations, cautioned that profit would likely fall below the previous financial year’s performance.
“We are pleased with sales growth [but] costs have been higher than anticipated,” said chief executive Tim Martin.
Wetherspoon shares fell more than 7% today after the chain issued its profit warning, as reported by City AM.
Anna Barnfather, analyst at Panmure Liberum, said: “We… continue to see downside risk to forecasts given the structurally low-margin model and ongoing cost inflation.
“We retain our concerns on longer-term margin recovery potential as labour costs rise, scope for further price increases and disposals diminishes.”
The warning places Wetherspoon amongst a growing number of pub groups attributing lower profits and escalating bills to business rates, following the government’s contentious reform of the commercial property tax and the conclusion of Covid-era financial assistance. The typical business rates bill for hospitality firms is poised to surge by 94 per cent over three years, driven by property revaluations and the withdrawal of pandemic support measures.
The outcry from the hospitality industry over business rates forced Chancellor Rachel Reeves to pledge “temporary support” for struggling pubs.
Recent labour market statistics from the Office for National Statistics show that the hospitality sector shed 20,014 jobs between September and December 2025. This decline occurred during a period when businesses would normally be recruiting additional staff ahead of the busy Christmas period.
The data underscores the magnitude of difficulties confronting hospitality businesses, as changes to employer National Insurance contributions and rising employment costs continue to take their toll on the industry.
Consecutive Budgets have dramatically increased the fiscal burden on hospitality firms, with businesses bracing themselves for another significant hit in April when business rates are expected to climb substantially.
Wetherspoon recorded a 4.7 per cent uptick in like-for-like sales during the second half of the year, driven by stronger performance across both food and beverage categories.
Bar sales leapt 6.9 per cent, whilst food registered a modest gain of 1.3 per cent, counterbalancing the marginal 0.7 per cent decline in hotel revenues. Gaming machine and fruit machine revenues experienced the most robust expansion at 9.1 per cent, with comparable sales throughout the fourth quarter climbing 6.1 per cent above the previous year.
The pre-Christmas rush also triggered a surge in footfall, with takings during the peak festive period advancing 8.8 per cent, though elevated expenses beyond initial projections dampened the sales surge.
Notwithstanding the cost increases, Britain’s most recognisable pub operator launched six fresh venues throughout 2025, encompassing sites at London Bridge station and Paddington, with the firm expecting to unveil an additional 15 establishments within this fiscal period.
Half a dozen sites were also disposed of, raising £3.3m, bringing the group’s directly managed portfolio to 794 pubs, whilst eight franchise outlets were simultaneously launched.
A further ten to 15 franchise operations are forecast to launch this year, featuring the inaugural Spanish opening at Alicante Airport.
