The UK is relearning the lessons of the 1970s: Wetherspoons boss
Hospitality group JD Wetherspoons has published its annual financial report for 2025, with the group posting strong numbers. However, rising energy costs means UK businesses have had to ‘relearn’ the lessons of the 1970s, it said.
The company had 85 fewer pubs at the FY25 period end and sales per pub were 29.0% above FY19, higher than the level of CPI inflation.
However, costs of energy (+57.8%) and wages (+34.5%), which have a heavy influence on all other input prices, rose more than sales, so that profits and earnings, while having made a strong recovery, are still below pre-pandemic levels.
Total sales in FY25 were £2,128 million, an increase of 4.5%, compared to FY24. LFL sales increased by 5.1% – bar sales by 5.1%, food by 5%, and slot/fruit machines by 11.0%.
Room sales for hotels declined by 11.9%, following the removal of third-party, online booking agents in the UK, which charged high levels of commission.
Operating profit, before separately disclosed items, was £146.4 million (2024: £139.5 million). The operating margin, before separately disclosed items, was 6.88% (2024: 6.85%). Profit, before tax and separately disclosed items, was £81.4 million (2024: £73.9 million).
Relearning old lessons
“A main lesson of the economic problems of the 1970s has been unlearnt in recent years – that is, if energy prices go up, as they did in the 1970s, inflation results, and almost everyone is poorer, except for those companies and countries which produce energy,” said Chairman Tim Martin.
In this connection, Martin said that Wetherspoons has just been informed that the ‘non-commodity’ elements of its electricity charges (in effect, taxes or “levies” which are added to electricity bills) will rise by an annualised £7 million, starting this month, so that the non-commodity element will be approximately 62% of its overall electricity costs.
“The increased cost is partly due to two new levies: one is a nuclear power subsidy, the other is a subsidy, as we understand it, for energy-intensive industries,” Martin said.
“As indicated, this substantial increase in levies, applicable to most consumers and businesses, will inevitably add to inflation in coming months.”
A particular concern of Wetherspoon is the absence of public debate about energy policy, Martin said.
“It is clear that reliance on renewable energy will require ‘standby’ energy resources approximately equivalent to the total UK fossil fuel resources from power stations today, for periods when sun and wind power is unavailable.
“The proposed solution is to replace the UK’s fossil fuel resources with nuclear energy. This will require a colossal amount of resources. For example, we understand that France, which has successfully implemented a nuclear strategy, has 56 nuclear reactors, whereas the UK has only 9, several of which are due to be decommissioned in 2028.”
The principal area for public debate is twofold: is nuclear energy really cleaner and what is the financial cost of transition, said Martin.
