Analysts have dismissed the theory that the opening of a Wetherspoon pub damages business for other licensed operators in the same area.
Rivals of the chain, which numbers 900 sites, have often argued that the group’s arrival is bad for business, but new data from the CGA Alix Partners Market Growth Monitor suggests the change is actually much more positive.
Its survey of towns and cities in which JD Wetherspoon has opened since 2010 reveals that many have subsequently seen an increase in licensed premises.
A year after it opened, just over a third of places had seen a fall in numbers within a half-mile radius of the new pub. Three years on, well over half (57%) of locations had seen growth or no change in the number of licensed premises, and only two in five (43%) had recorded a decline.
Rather than fuelling the view that a Wetherspoon pub spells disaster for local competitors, the data endorses the chain’s suggestion that a new opening simply stimulates demand in the area.
Change in number of licensed premises within a 0.5 mile radius of a new JD Wetherspoon opening
“Rather than driving independents out of business and scaring off multi-site operators, a new Wetherspoon seems to have a halo effect, attracting more people into an area to eat and drink,” stated the report.
This is especially true in city centres. Three years after opening, 67% of Wetherspoon’s new city locations had seen the number of licensed premises within half a mile increase. That chimes with the view from CGA research that many city centres have thrived for new openings in the last decade or so.
The picture is a little different in the suburbs. Here, fewer than a third (30%) of locations have recorded growth in licensed premises three years after Wetherspoon opened its doors.
Breaking down the licensed premises that are opening following Wetherspoon’s arrival, CGA notes a similar split in impact between restaurants and pubs. Three years after its arrival, the number of food-led sites increased in more than half (53%) of locations—but the number of drink-led sites increased in less than half that number (26%).
“Drinkers’ pubs and bars can clearly find it hard—though by no means impossible—to complete with Wetherspoon’s value offer,” the report added. “But for restaurants, the chain’s arrival appears to be more of an opportunity to drum up footfall than a threat to trading.”