Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Pub groups face harsh winter amid energy price hikes

Pub group shares are already struggling to recover from Covid

Source: Bloomberg

Pub groups have written to the government to demand a price cap on energy bills for the business sector. Companies including Greene King, owned by Hong Kong company CKA, said energy prices have risen by 300% in some cases and that they are now paying more for gas and electricity bills than rent. Ofgem has increased the energy price cap for domestic customers but there is no such price cap for businesses.

The move is a reminder that winter is coming for the last few listed pub groups, such as JD Wetherspoon, Mitchells & Butlers PLC and Fuller Smith & Turner, and it could be bleak. While JD Wetherspoon’s has already fixed its energy prices for 2023, it is facing higher wage costs and sales have yet to recover from their Covid slump.

Shares in the company are down 56% this year to 490.6p. In its July pre-close trading date, Wetherspoon’s told investors that it would now make a full-year loss of around £30 million. Sales were down 0.4% in the fourth-quarter, compared with a dip of 4% in the previous quarter.

Its clientele tends to be those on lower incomes, such as retired people and students. While its discounted beer and curry nights may appeal to those on a smaller budget, customers may prefer to stay at home with supermarket-bought drinks. Indeed, the company’s customarily outspoken trading statement complained of a “tax inequality” between supermarkets and pubs.

Inflationary “challenges” hit pub groups

Meanwhile, shares in Mitchells & Butlers, which owns Harvester, All Bar One and Vintage Inns, are down 46% to 156.6p. The pub operator told investors in July that inflationary cost pressures were a “major challenge” to the company, “particularly in the case of utilities, wages and food costs,” and that “these will persist at or above current levels well into the next financial year, increasing and prolonging the medium term impact on margins.”

Indeed, the company said in its third-quarter trading update that sales for the year to date were down 1.6%, due to Covid-related closures. Over the first 42 weeks of the year, drink sales fell by 4.9%, although food sales were more buoyant, up 5.5%.

Fuller Smith & Turner’s are similarly down 25% so far this year to 590p. Its summer trading update was more upbeat, with the company reporting a “sales recovery… especially in the City and West End of London.” Sales for the first 16 weeks of the new financial year were up 3% on pre-pandemic levels and up 81% on the same period in 2021. Fuller’s says its premium offer and supply chain management provide it with some protection against inflationary pressures.

Post-Covid fillip fails to materialise for pub sector

Pub companies are already struggling to recover from the Covid-19 pandemic. The footfall in many city centres remains quieter as workers continue to work from home on a regular basis.

“Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated,” JD Wetherspoon said in its trading update. What’s more, wages have increased due to National Insurance hikes. Analysts at broker Deutsche Bank Aktiengesellschaft recently cut their price target on Wetherspoon's shares from 875p to 735p.

While these substantial share price dips may look like a buying opportunity, more pain looks yet to come for the pub sector. As such, unfortunately - for now at least - better value exists elsewhere.

Take your position on 17,000+ shares with the UK’s No.1 platform.* Learn more about trading or investing in shares with us, or open an account to get started today.
* Best trading platform as awarded at the ADVFN International Financial Awards 2022

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" edit-mode="false" style="--live-prices-table-rows:5" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.