Tim Martin: 'Pubs are still over-rented'

31-Jul-2013 - Last updated on 01-Aug-2013 at 07:57 GMT

Tim Martin: "Out of London, in the pub trade there’s still a lot of pubs that are greatly over-rented"

JD Wetherspoon (JDW) chairman Tim Martin has told the Publican's Morning Advertiser's sister title M&C Report that a lot of pubs are still “greatly over-rented” as a legacy of the last financial boom.

Announcing results for the 11 weeks to 14 July, JDW said it intends to provide an update on any impairment and onerous lease provisions at its full-year results.

Martin said: “I think there’s quite a hot property market in London. Out of London, in the pub trade there’s still a lot of pubs that are greatly over-rented — and in London, as a matter of fact.

“The tail end of the last boom is a legacy of over-rented pubs. I suppose the effects of this can last for a few decades in some places. There’s probably quite a lot of people seeking to open pubs and restaurants in the south-east but I would guess that demand is subdued in the rest of the country.”

Martin suggested consumer confidence may have “turned a corner”. “It’s about five years since the credit crunch and we haven’t gone to hell in a handcart, we’ve just had to tighten our belts a bit.”

JDW reported an improvement in operating margin, which was 9.5% in the 11 weeks (including some one-off benefits) against 8.7% in the year-to-date.

Its prices are around 2% ahead of this time last year — “that helps a little bit” — while the beer-duty cut has been a “great help”. The company also had fewer one-off costs associated with a property dispute.

Like-for-like sales grew 3.5% in the 11 weeks, with total sales up 6.2%. Martin highlighted a “variety of small factors”, such as menu development, the range of beers, personnel and pub designs.

Martin said the weather over the period had been a “minor plus”, adding: “I think we are more ‘weather-neutral’ than most.”