Pub giant JD Wetherspoon has swung back to a significant profit as higher food sales helped its post-pandemic sales recovery continue.
Analysts said on Friday that the chain will “benefit from trading down” by customers squeezed by the rising cost of living.
The company, which runs 826 pubs across the UK, saw total sales rise by 10.6% to £1.92 billion for the year to July 30.
Wetherspoons said like-for-like sales grew by 12.7% year-on-year, as it benefitted from a significant rise in food sales, which increased by 17.7%.
Bosses at the business said sales growth has continued in recent weeks, with like-for-like sales increasing by 9.9% over the nine weeks to October 1.
Tim Martin, chairman of JD Wetherspoon, said: “Wetherspoon continues to perform well.
“The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance.”
During the year, Wetherspoon slightly trimmed its pub estate, as it sold, closed or terminated the leases of 31 pubs.
It said there was a £7 million cash boost after fees as a result. Wetherspoons also opened three pubs.
Mr Martin also told the PA news agency that its focus on “the basics” and competitive pricing have driven its improved performance.
He said: “Wetherspoons is a resilient business. It has been around for 44 years and our staff have been working here for an average of 14 years.
“The business has been through nearly everything and remains strong.
“Working to remain very competitive in price has been very important over the past year because it has been difficult for everyone financially.
“We have focused on the basics – things like real ale and coffee – while making sure the pricing is right. That’s what has worked.”
James Wheatcroft, equity analyst at Jefferies, said: “Momentum continues into the current year.
“We argue that Wetherspoons’ low relative price positioning and well-located and well-invested premises will gain market share and benefit from trading down.”
Roberta Ciaccia at Investec added that the latest figures were “strong and broadly in line with market expectations”.