JD Wetherspoon has delivered robust financial results, posting revenues of £2.13billion for the year ending July 27.
But the pub chain has warned Chancellor Rachel Reeves that Government-imposed cost hikes could drive inflation across the UK economy.
The company achieved like-for-like sales growth of 5.1 per cent, demonstrating resilience in challenging market conditions.
Early trading in the new financial year has maintained momentum, with like-for-like sales rising 3.2 per cent in the opening weeks.
Sir Tim Martin, Wetherspoon's chairman, said the Government's policies under Ms Reeves could result in £60million of extra costs each year.
Mr Martin warned that rising national insurance contributions, higher wage bills, escalating energy expenses and new packaging levies will all add pressure to the business.
He said: "Cost increases such as these will undoubtedly add to underlying inflation in the UK economy, although Wetherspoon, as always, will endeavour to keep price increases to a minimum."
The warning to Ms Reeves comes as businesses across the hospitality sector face mounting pressure from regulatory changes and wider economic policy decisions, with leaders at Shephard Neame slamming the Chancellor for "bad policy" this week.
The pub chain has warned Rachel Reeves that cost hikes could drive inflation
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The performance reflects increases in both bar and food sales across the group's estate of nearly 800 establishments.
The pub giant has pledged to shield customers from the full impact of rising expenses, maintaining its commitment to affordable pricing that has long defined its market position.
Mr Martin said: "While we expect reasonable performance in the current financial year, Government-led cost increases in areas such as energy may have a bearing on the outcome."
This approach reflects Wetherspoon's understanding that value remains paramount for British consumers facing their own financial pressures.
Industry analyst Robyn Duffy from RSM UK noted: "Wetherspoon's highly competitive pricing continues to underpin its ability to attract cost-conscious consumers."
Wetherspoon's pricing strategy has likely played a key role in helping the chain outperform the wider UK pub sector
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Ms Duffy added: "The company's determination to absorb much of the cost burden rather than passing it directly to patrons demonstrates both commercial acumen and social responsibility."
This pricing strategy has likely proven instrumental in the chain's ability to outperform the broader UK pub market, particularly as households continue to seek value amid economic uncertainty.
Despite significant cost pressures, Wetherspoon's is pressing ahead with ambitious expansion plans.
The company intends to launch 30 new establishments during the current financial year, comprising 15 directly managed pubs and 15 franchised locations.
This growth strategy signals confidence in the brand's resilience and its ability to weather the storm of rising operational expenses.
The expansion will build upon the group's existing portfolio of 794 pubs operating at the close of the last financial year.
The commitment to opening new venues while simultaneously managing a £60million increase in costs demonstrates the company's faith in its business model.
This expansion represents a vote of confidence in Britain's pub sector, even as the industry confronts unprecedented financial challenges.
The strong performance has been driven by resilient demand across Wetherspoon's core offerings.
Bar sales remained buoyant while the food division expanded its appeal throughout the trading day, with all-day breakfasts and affordable menu staples proving popular with patrons.
LATEST DEVELOPMENTS
The warning to Ms Reeves comes amid growing strain on the hospitality sector, driven by shifting regulations and broader economic policy challenges
| BBCHotel room revenues declined by nearly 12 per cent following the company's strategic decision to withdraw from online booking platforms in the UK.
However, this reduction has not materially impacted overall performance.
Ms Duffy observed: "Wetherspoon's continues to outperform the wider UK pubs market."
She added: "Drinks sales remain robust, while the food division continues to broaden its appeal across the day."