Wetherspoon Warns of Inflation Impact as Energy Costs Surge
JD Wetherspoon, the popular pub chain, has issued a warning about the impact of rising inflation in the coming months, largely driven by increased energy costs. Despite robust sales growth, the company's profitability remains below pre-pandemic levels.
Wetherspoon's energy costs have surged by 57.8% since 2019, despite sales increasing by 17% in the same period. The pub group is set to pay an additional £7 million on 'non-commodity' elements of its electricity bill, due to new taxes and subsidies for nuclear power and energy-intensive industries. This is financed by a surcharge on electricity bills, known as the 'Electricity Generator Levy'.
The UK government plans to significantly increase nuclear capacity from 6.5 gigawatts to up to 24GW by 2050. However, Wetherspoon has questioned the assumption that nuclear energy is cleaner, highlighting the financial cost of transition. The company also faces a £2.4 million cost from the packaging tax and an extra £60 million from the government's employer National Insurance rise.
Wetherspoon, which generated approximately £1 in every £1,000 of all UK tax revenue in the last financial year, is bracing for higher inflation due to these increased costs. The pub group's profitability, while improving, is still below pre-pandemic levels, reflecting the challenges posed by rising energy costs and new taxes.
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