Wetherspoon shares sink after business rates knock profit
Wetherspoon shares slumped on Wednesday after the pub giant laid bare the scale of the financial hit from November’s tax-raising Budget.
The FTSE 250 member said cost rises across energy, wages, repairs and business rates had put up costs by a staggering £45m in the 25 weeks to mid-January. That would imply a cost rise of as much as £94m over the course of a year.
The firm, which is one of Britain’s biggest pub chains with nearly 800 sites, warned profit was likely to be lower than in the previous financial year.
“We are pleased with sales growth [but] costs have been higher than anticipated,” said chief executive Tim Martin.
Wetherspoon shares sunk 6.7 per cent to 688.50 pence in early morning trading following the chain’s profit warning.
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.”
Damaged profits
The warning adds Wetherspoon to a chorus of pubs blaming business rates for suffering profits and soaring bills, following the government’s controversial overhaul of the commercial property tax and the end of Covid-era financial support.
The average business rates bill for a hospitality firm is set to soar by 94 per cent in three years due to property value reassessments and the end of pandemic-era cash support.
The business rates backlash from the hospitality sector left Chancellor Rachel Reeves forced to confirm that struggling pubs would be provided “temporary support”.
The latest labour market data from the Office for National Statistics also reveals that hospitality employed 20,014 fewer people in December 2025, compared to September 2025. This comes at a time when the sector would be traditionally staffing up, in preparation for the busy festive season.
The figures reinforce the scale of the challenges facing hospitality, with the impact of changes to employer NICs and other increased employment costs continuing to impact the sector.
Successive Budgets have increased the cost and tax burden on the hospitality sector exponentially, with businesses braced for a further blow in April when business rates are set to rise significantly.
New pub branches
Wetherspoon reported a 4.7 per cent rise in like for like sales during the second half of the year, bolstered by increase in sales across food and drink.
Bar sales jumped 6.9 per cent, while food saw a slight increase of 1.3 per cent, offsetting the slight 0.7 per cent dip in hotel sales.
Slot and fruit machine sales saw the strongest growth of 9.1 per cent, with like for like sales during the final quarter 6.1 per cent higher than the prior year.
The lead up to Christmas frenzy also caused an influx of customers, with sales over the main Christmas period rising 8.8 per cent, but higher costs than originally anticipated impacted the boom in sales.
Despite the rise in costs the UK’s most well-known pub chain opened six new pubs during 2025, including in London Bridge station and Paddington, with the company anticipating opening a further 15 pubs in this financial year.
Six locations were also sold, generating £3.3m, bringing the chain’s managed trading estate to 794 pubs, while eight franchised pubs were also opened.
A further ten to 15 franchises are predicted to open this year, including the first opening in Spain in Alicante Airport.