JD Wetherspoon share price drops as founder Tim Martin attacks living wage

Tim Martin, founder and chairman of 900-strong pub group JD Wetherspoon, has hit out at chancellor George Osborne’s living wage policy, claiming it could have an adverse impact on pubs. 

 

Martin warned: “The recent government announcement regarding the living wage adds considerable uncertainty to future financial projections in the pub industry.”

 

He said: “The average price of a pint in a supermarket is less than £1 and we estimate staff costs to be around 10 per cent or 10 pence. In contrast, a pint in a pub costs around £3 and staff costs are about 25 per cent or 75 pence. Increased labour costs therefore affect pubs with far greater force than supermarkets.”

 

His attack came as Wetherspoon repeated that this year’s pre-tax profits are unlikely to top last year’s £79.4m. Like-for-like sales in the 11 weeks to 12 July rose 2.9 per cent, but operating margins were seven per cent compared with 8.3 per cent in the same period in 2014. Its shares closed down 8.4 per cent.