MarketLine Blog

JD Wetherspoon hurt by inflation not tax

JD Wetherspoon has called for “tax parity” with British supermarkets citing that the large supermarkets benefit better from the current tax system than pubs. Now, a business calling for tax parity, i.e. equal treatment fiscally, with reasons for doing so limited to the same reasons any other business can give, i.e. inflation, can only be solipsistic. For it is not just JD Wetherspoon and their 800 or so pubs which suffer from a decline in the value of the £, or currently surging inflation, but all other actors in the economy save net debtors.

Further to the point, when a business trading in an industry which has been suffering from an overarching, long-term decline attempts to conflate consumer trends with the macro-environment, then reason itself is undermined. Markets change, just like, and as often caused by, the changes in the culture of society: since the end of the war, technological change, consumer trend shifts, and waves of immigration in nearly every decade have changed the cultural face of the country. As trends change, firms, the supply-side, should adapt or face extinction.

JD Wetherspoon’s call for tax parity is not a comment on an unfair tax system. Big business has been able to call upon armies of accountants for decades to game profit and loss accounts, the phenomenon acting, on the contrary, as one of the prime consistencies or characteristics of the British economy. No, the statement is a comment on inflation and how the biggest sufferers will be and are those already struggling. Announcing an operating profit dipping 2% in the first half of last year, year-on-year, coincides with a relatively turbulent period for prices in the UK. This is revealing, and it also vindicates the statement that the most accurate efforts to predict foreclosure and bankruptcy will ultimately rest upon whether or not the entity or business was relatively healthy in the first place: the macro-environment determining nothing by itself; business model being king.

Find this interesting. ‘Alcohol industries’ can be interested to you as well.

Posted in Consumer, Drinks.

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