Wetherspoon vows to keep prices low amid soaring energy and tax costs

Published: 03 October 2025. The English Chronicle Desk

The chairman of the UK pub giant Wetherspoon’s, Tim Martin, has promised to keep price increases at his establishments to a minimum, amid mounting pressures from rising energy bills and new packaging taxes. Martin highlighted the impact of the recently introduced “extended producer responsibility” levy, a packaging tax that has dramatically increased costs for the chain. He revealed that Wetherspoon’s annual expenses from the tax alone are set to triple, rising from £800,000 to £2.4 million, as suppliers pass the cost of bottles, cans, and other packaging directly onto the pub group.

Martin further criticised what he described as “non-commodity” energy costs – additional taxes and levies that are separate from the base cost of electricity. He stated these levies would add approximately £7 million per year to the chain’s operational expenses. Among the contributors to the rise, Martin singled out charges intended to support the construction of nuclear power stations and subsidies for energy-intensive industries.

The consultancy Cornwall Insight previously projected that the upcoming nuclear regulated asset base (RAB) levy, designed to finance new nuclear power stations, would add just under £10 to the annual household energy bill starting next year. This includes adjustments for costs that suppliers began incurring late this year but have yet to recover from customers. Martin argued that the increase in levies would inevitably feed into inflation and asserted Wetherspoon’s commitment to mitigating price rises wherever possible.

With energy levies now accounting for 62% of the company’s electricity costs, the chain is facing a significant squeeze. Martin also noted that additional government-mandated costs, such as the rise in employers’ national insurance contributions (NICs) and minimum wage hikes, had already added £60 million annually to the company’s outgoings. He echoed concerns raised earlier by Jonathan Neame, chief executive of Shepherd Neame, another pub chain, who criticised the government for policies that, in his view, have imposed further financial burdens on the hospitality industry.

Despite the cost pressures, Wetherspoon’s reported a 5.1% increase in annual sales at established pubs, reaching £2.1 billion for the year ending 27 July. Pre-tax profits rose by 10.1%, hitting £81.4 million. Martin expressed cautious optimism for the current financial year, though he acknowledged that continued increases in energy costs could affect the outcome.

Investors, however, reacted to slower sales growth at the beginning of the new financial year, with JD Wetherspoon shares falling over 5% in early trading. The company reported that comparable sales – those from pubs open more than a year – grew 3.7% over the nine weeks to 28 September, slightly lower than the previous annual growth rate of 5.1%.

Market analysts have highlighted the challenges the pub chain faces despite its revenue recovery. Richard Hunter, head of markets at Interactive Investor, noted that while sales and revenue have climbed well above pre-pandemic levels – with sales per pub up 29% and total revenues 17% higher – the surge in energy and wage costs, which have risen 57.8% and 34.5% respectively compared to pre-pandemic levels, has largely offset these gains. Hunter also pointed to the subdued UK economic environment, warning that households may reduce discretionary spending as financial pressures mount, which could affect consumer visits to pubs and restaurants.

Martin’s comments underscore the broader challenges faced by the hospitality sector, where businesses are contending with a combination of government levies, operational costs, and changing consumer behaviour. Both Wetherspoon’s and Shepherd Neame are calling on policymakers to reconsider measures that increase business costs, arguing that such policies risk undermining sector profitability and growth.

As the UK economy continues to face uncertainty, Wetherspoon’s commitment to keeping prices stable is likely to be closely watched by both customers and competitors. The company’s ability to manage rising costs while maintaining profitability will be a key test of resilience for one of Britain’s largest pub chains.