JD Wetherspoons Cuts Commercial Property Pub Expansion due to High Taxes

Posted on 14 March, 2012 by MOVEHUT

The pub chain JD Weatherspoons, which currently has 841 commercial properties in its portfolio, cut its expansion plans for this financial year due to an increase in carbon tax, Value Added Tax (VAT) and excise duty.

The commercial property chain was due to open 50 new pubs this financial year, but instead they will open just 40. The company have blamed the decision on an increase in taxes.

From 26 August 2011 to 22 January 2012, the company’s tax bill increased by 9.8 per cent when compared to the previous year. This equates to £250.1 million for this period and is equal to 43.9 per cent of their total sales. The main changes in taxation costs were VAT charges increasing by 17.7 per cent to £115.6 million, which was an increase of £20.5 million. Alcohol duty increased by £4 million during the same period, and carbon tax was also introduced, which equated to £1.2 million.

The pub chain reported many financial increases during the 26 weeks, up until 22 January 2012, which included:

  • £35.8 million profits before taxation, which is an 11.1 per cent rise when compared to the same period the previous year
  • Like for like sales increased by 2.1 per cent
  • Total revenue rose to £569.4 million – an increase of 8.4 per cent
  • Bar sales increased by 3.4 per cent, whilst food sales only increased by 0.1 per cent

Speaking of the taxation, Tim Martin, Chief Executive of the pub chain, said: “This tax, and hence price, disparity has been felt more acutely in less-well-off areas of Britain, where price disparities matter more – and the number of closed pubs in these locations is clearly evident.”

However, although the company’s financial performance looks promising, like for like sales since the last statement (23 January to 4 March 2012) were down by 0.7 per cent. Mr Martin stated: “Sales since our 18 January 2012 per-close statement have been disappointing, with like-for-like sales in six weeks to 4 March declining by 0.7%.”


JD Weatherspoons have so far opened 20 new commercial properties, and closed two, since 26 August last year. The two closures were due to a lease expiring and a sale. However, the company still plan to open another 20 pubs during this financial year, as Mr Martin expressed: “Over the next few months we will review our plans for pub openings in future financial years, taking account of our concerns for the tax regime on pubs.

“The main challenges for the company, in this financial year of 53 trading weeks, will be the continuing cost pressures resulting from government legislation, including further increases to excise duty, business rates and carbon tax,” Mr Martin added.




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