New blow for 24-hour drinking

PUBS group JD Wetherspoon will not keep its outlets open 24 hours a day once licensing laws are relaxed because it says the demand for round-the-clock drinking just isn't there.

Speaking to This is Money, finance director Jim Clarke said that some Wetherspoons outlets would open for an hour or two extra during the week and perhaps until 1am at weekends but no more than that. He said 24 hour opening would not prove the sales bonanza that some analysts predicted.

'We just don't feel that you will get masses of extra trade by staying open for 24 hours. I'm not sure there will be a huge clamour for it at all. If you run a pub with music and a nightclub feel you may want to open quite late, but I can't see a whole push for it across the industry,' Clarke added.

Wetherspoons, which prides itself on not having television screens or loud music in many of its outlets, has been turning itself around so far in the second quarter with like-for-like sales up 0.9%, an improvement on the 0.3% drop in the first quarter.

Last year the company saw sales across its estate drop by about 4% thanks in part to its ban on television ? while most of the country was busy watching England exit from the Euro 2004 soccer tournament, most of Wetherspoons outlets remained TV-free zones.

Overall sales in the 25 weeks to 16 January are up 3.8% though on a like-for-like basis the improvement was a more modest 0.3%.

Clarke said that pub costs continue to rise and he pointed to the increase in the national minimum wage as a contributory factor, although Wetherspoons staff are paid more than the basic rate.

'It's a comparative thing. If the minimum wage goes up it creates an expectation elsewhere that you need to increase pay rates. There's nothing new here. Pub costs are higher than in previous years and this is putting pressure on operating margins. The market remains competitive as ever,' he said, adding that Wetherspoons pubs were 'busier than ever'.

Wetherspoons has earmarked 15 pubs for disposal, some of which are small underperforming outlets and others that are larger. The sale will result in an exceptional charge at the half-year stage but Clarke said it was not possible to quantify this as yet. Half-year results will be announced in early March.