May 9, 2018 / 7:06 AM / 6 months ago

UPDATE 1-Wetherspoon warns again on costs as sales rise 3.5 pct

(Adds details on costs, outlook, Brexit)

May 9 (Reuters) - Pub operator JD Wetherspoon reported a 3.5 percent increase in third-quarter comparable sales on Wednesday and stuck by its previous forecasts for results this year while warning it faced significant cost increases in the second half.

Chairman Tim Martin, a well-known supporter of Britain’s planned departure from the European Union, also said he was sure the country should leave the EU customs union post-Brexit in aid of reducing taxes on non-EU food and drink imports.

Sales growth at the pub chain was a touch slower than the 4 percent growth seen a year ago, which the company said was due a later May bank holiday this year that did not fall within the reporting period.

Like other operators in the British pub sector, Wetherspoon has been hit by increased costs, mainly due to wage inflation, rising property costs and unfavourable currency exchange rates.

“We continue to face significant cost increases in the second half in areas which include labour, business rates and the sugar tax,” Martin said.

Wetherspoon’s prices undercut many of its peers and it has leveraged technology with a mobile application that allows customers to order drinks from their table rather than having to go to the bar to help draw customers at a time when non-essential spending by Britons has been squeezed.

Shares in the company were roughly flat at opening in London. (Reporting by Rahul B in Bengaluru; editing by Patrick Graham)

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