JD Wetherspoon, the pub operator that specialises in cheap food and drink, is benefiting from the “Aldi effect” as hard-pressed consumers trade down to cheaper alternatives. The company yesterday delivered a shot in the arm to the struggling pub sector by reporting an upturn in like-for-like sales in the second half of the year after beer, wine and food promotions.

It reported a 0.4 per cent rise in comparable sales in the 11 weeks to July 13, taking the performance for the second half as a whole to flat - well ahead of the 3.1 per cent decline experienced in the second quarter.

The company, which runs about 700 pubs under the Wetherspoon and Lloyds No1 brands, had said in March that it expected the second-half performance to be “broadly similar to those of the second quarter”. Paul Hickman, leisure analyst at KBC Peel Hunt, said: “This looks like initial evidence of an Aldi effect, where customers switch to lower-cost alternatives.”

The group attributed part of the rise to marketing and promotions. Keith Down, the finance director, said that a recent voucher mailshot to 15 million homes offering big discounts had generated a bigger take-up than usual.

Mr Down said that favourites with customers included burger, chips and a pint of beer at £4.59 and an afternoons-only offer of fish and chips for £3.10. He hoped that the passing of the first anniversary of the smoking ban in England would make comparatives easier.

The second-half rally means that like-for-like sales for the first 50 weeks of the financial year to July 27 fell by 1 per cent, with overall company sales up 2.2 per cent thanks to the opening of 23 pubs. Wetherspoon said that the performance was satisfactory in the context of last year's record sales and the present economic climate.

However, the company said that it continued to expect “a considerable increase in costs”, particularly energy, food, staff and tax. In a swipe at the Government, it said: “Although it is widely believed that current inflationary costs stem from external sources, a large proportion of our cost increases [especially excise duty and labour] stem from government legislation.” Tim Martin, chairman and founder, said that the cost increases made higher prices to the customer inevitable.

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