VAT disparity between supermarkets and pubs is the biggest danger to the pub industry, according to JD Wetherspoon. (Release)
The pub chain said in its interim management statement:
Since supermarkets pay almost no VAT in respect of food sales, whereas pubs pay 20 per cent, supermarkets are able to subsidise their drinks’ prices to the detriment of pubs, around 10,000 of which have closed in the last decade. It does not make economic or social sense for the government to favour powerful supermarkets with what amounts to a “tax break”, especially since pubs generate so many more jobs, and so much more tax, per pint or meal, than supermarkets.
Despite tax and other cost pressures, the company reported that like-for-like sales rose by 3.7 per cent and total sales had risen by 7.6 per cent in its first quarter (the 13 weeks to 27 October). Eight new pubs were opened in the period and the 12 more are under development. The company anticipates between 40 and 50 pubs opening this year, more than was anticipated.