Wetherspoons trims its estate as sales hold steady

J D Wetherspoon has sold seven pubs and opened just two so far this financial year, as the pub giant continues to take a measured approach in the face of rising costs and economic headwinds. In a note issued yesterday (07 May), investment bank Peel Hunt described the estate change as “little” over the quarter, and forecasts six or seven openings this year. The restrained approach reflects what analysts interpret as a focus on freehold security and capital discipline rather than site expansion. Sales remain broadly stable. Like-for-like sales rose by 5.6% in the third quarter, bringing the year-to-date increase to 5.1%. The five-quarter average sits at 5.3%, and Peel Hunt’s updated forecasts continue to assume 5% growth for 2025. These forecasts have been revised “solely to reflect additional share buybacks and freehold reversions,” with no change to underlying trading assumptions. Peel Hunt acknowledged a timely spell of good weather but warned that “all the incremental sales will be needed to offset April’s increase in costs”. Around 72% of Wetherspoon’s estate is owned freehold, and the group currently trades at a 7.9x EV/EBITDA multiple under IAS 17, which Peel Hunt describes as “fair value”. Even so, the analysts note, “we believe there is better share value elsewhere”.

Closures across the wider sector

Wetherspoon’s restrained expansion and selective disposals are taking place as the wider pub sector comes under renewed pressure. In an update published last month, the Campaign for Real Ale (CAMRA) warned that closures and conversions could rise sharply following a double hit to operator costs. From April, employer National Insurance contributions increased and business rates relief in England was reduced from 75% to 40%. Scotland and Wales have also shifted to 40% relief. CAMRA reports that 1,062 pubs across Great Britain ceased trading in 2024, with 210 converted to other uses. A further 303 closures and 46 conversions were recorded in just the first three months of 2025.

Calls for urgent government support

CAMRA chairman Ash Corbett-Collins said in a statement last month: “Hundreds of pubs have already stopped trading this year. How many more need to shut before the government takes notice?” He urged the Chancellor to reconsider recent tax decisions and said action was needed to prevent more closures. “Without action from governments in all four nations, we risk losing more pubs, which are a vital part of our social fabric and are at the heart of community life up and down the UK.”