By Sangameswaran S
(Reuters) – Rising wages will hit results at JD Wetherspoon <JDW.L> this financial year, the budget British pubs group said on Wednesday, sending its shares as much as 6 percent lower in early trade.
The company, run by pro-Brexit businessman Tim Martin, said it had no immediate plans to recoup the higher costs by raising prices, but would review that position as the year progresses.
“As has been widely reported, unemployment is at a record low, putting upward pressure on wages. As a result, Wetherspoon is increasing pay of our staff starting from this week,” Martin said in a statement, without giving a figure for the pay rise.
“It is difficult to be too precise at this early stage of the current financial year, but we now expect a trading outcome slightly below that achieved in the previous financial year,” he added.
Wetherspoon, which runs more than 900 pubs in Britain and Ireland, reported a 5.5 percent rise in comparable sales for the 13 weeks to Oct. 28, the first quarter of its fiscal year.
Total sales rose 6.2 percent.
As well as higher wages, the company has been dealing with a new sugar tax on drinks, rent increases and higher power bills.
Recovering from a recent appendix operation, Martin also said he would be working part-time from home while recuperating.
Wetherspoon, which started in 1979, said it expected to open between five to 10 pubs this financial year.
(Reporting by Sangameswaran S in Bengaluru; Editing by Louise Heavens and Mark Potter)