JD Wetherspoon expansion pushes new town and city openings

New Market Growth Monitor from CGA and AlixPartners suggests the popular pub group often has a positive rather than negative effect on licensed trade.

JD Wetherspoon’s pub openings are often followed by new launches from other licensed operators, according to exclusive new data in the latest edition of the Market Growth Monitor from CGA and AlixPartners.

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Research for the report appears to counter the argument that Wetherspoon’s expansion damages other restaurant pub and bar businesses in the towns and cities that it targets. Three years on from a new Wetherspoon opening, more than half (57.3%) of the areas within a half-mile radius have increased their number of licensed premises, the Monitor shows, with only two in five (42.6%) recording a decline.

The figures reveal that new Wetherspoon openings have been followed by a particularly sharp increase in food-led licensed premises nearby, suggesting that the group can stimulate general local interest in eating out. The positive effect has been greater in city centres than in suburban areas.

The data is based on a sample of 223 Wetherspoon pubs that have opened since 2010 and is drawn from CGA’s Outlet Index, a comprehensive and continually updated database of all licensed premises. More analysis of restaurant, pub and bar openings can be found in the new edition of the quarterly Market Growth Monitor from CGA and AlixPartners.

CGA vice president Peter Martin said: “It’s sometimes argued that JD Wetherspoon has a damaging effect on the towns and cities where it opens new pubs, but our latest Market Growth Monitor indicates this often isn’t the case. There is no doubt that Wetherspoon’s value proposition brings challenges for nearby drink-led pubs and bars, but for well-differentiated food-led offers the impact can be more positive or neutral. People continue to eat and drink out, and there is clearly room for a huge diversity of multi-site brands and independents to succeed.”

“This new analysis highlights the importance of towns and cities having a critical mass of vibrant and varied eating and drinking out venues as it provides a compelling reason for people to visit the area,” AlixPartners managing director Graeme Smith said. “There is no point being the only venue on a ‘circuit’, so competitors failing does not always mean a positive outcome for operators.”

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