JD Wetherspoon has slumped to a £95m annual loss as sales plunged during the coronavirus lockdown, with the pub chain’s outspoken founder renewing his criticism of the UK government’s restrictions to control the pandemic.
The chain, which reported a £95m profit in its previous financial year, said revenues slumped by 30.6% to £1.26bn as its pubs were hammered by the lockdown. The pre-tax loss includes £60m of exceptional one-off costs, including £29m Covid-related costs for stock losses, staff costs and equipment.
The pub chain said it is in consultation to reduce the 1,000 staff at its pubs at six UK airports by 450, which it announced last month. It is also reducing head office staff numbers by 108.
Confirmation of the cuts come a day after the pub and brewer Marston’s announced it was axing 2,150 jobs, the biggest cuts in the sector since the pandemic began. Last week, Greene King said it was cutting 800 jobs and closing 79 pubs and restaurants.
Wetherspoons said since 4 July 429 employees have tested positive for coronavirus, 1% of its 43,000 total staff. The company said that is in line with the 0.9% rate testing positive in the total UK population and less than the 1.5% Amazon reported among its US employees.
“If pubs were, indeed, ‘centres of transmission’ it might be expected that infection rates would be higher among employees than those of either the general population or companies like Amazon,” said Tim Martin, the founder and chairman of JD Wetherspoon.
The company said like-for-like sales in the first 11 weeks of its new financial year are down 15% with “strong sales in the first few weeks followed by a marked slowdown since the introduction of a curfew and other regulations”.
Martin said: “It appears the government and its advisers were clearly uncomfortable as the country emerged from lockdown. They have introduced, without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations. None of the new regulations appears to have any obvious basis in science.”
Martin said the “most damaging” regulation for the hospitality industry has been the introduction of a 10pm curfew, “which has few supporters outside the narrow cloisters of Downing Street and Sage meetings”.
Analysts at Investec remain positive about the pub chain’s prospects despite the ongoing impact of restrictions and the prospect of a tough winter.
“The path of recovery rarely runs in a perfectly straight line, and new government restrictions will continue to buffet JD Wetherspoon,” Investec’s Alastair Reid said. “However, the company is well placed to ride out the storm and the results demonstrate it is well positioned to capture a growing share of demand as and when it returns. We expect the company to emerge even more robustly from the crisis.”