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JD Wetherspoon has plunged to an annual loss of £ 95 million as sales plummeted during the coronavirus shutdown, and the pub chain’s founder renewed his criticism of the UK government’s restrictions to control the pandemic.
The chain, which reported a £ 95 million profit in its previous financial year, said revenue fell 30.6% to £ 1.26 billion as its pubs were hit by the shutdown. The pre-tax loss includes £ 60 million of one-time exceptional costs, including £ 29 million of Covid-related costs for loss of stock, personnel and equipment costs.
The bar chain said it is in consultation to cut its pub staff by 450 at six UK airports, which it announced last month. It is also reducing head office staff by 108.
The confirmation of the cuts comes a day after Marston’s pub and brewery announced it would cut 2,150 jobs, the biggest cuts in the industry since the pandemic began. Last week, Greene King said it would cut 800 jobs and close 79 pubs and restaurants.
Wetherspoons said 429 employees have tested positive for coronavirus since July 4, 1% of their total staff of 43,000. The company said it is in line with the 0.9% rate that tested positive in the total UK population and less than the 1.5% that Amazon reported among its US employees.
“If pubs were, in fact, ‘transmission centers’, you might expect infection rates to be higher among employees than the general population or companies like Amazon,” said Tim Martin, founder and president of JD Wetherspoon.
The company said comparable sales in the first 11 weeks of its new financial year were 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 seems that the government and its advisers were clearly uncomfortable when the country came out of the blockade. They have introduced, without consultation, under emergency powers, an ever-changing series of ill-thought-out regulations. None of the new regulations appear to have an obvious scientific basis. “
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Martin said the “most damaging” regulation for the hotel industry has been the introduction of a 10 pm curfew, “which has few followers outside the narrow Downing Street cloisters and Sage meetings.”
Investec analysts remain positive about the outlook for the bar chain despite the continued impact of restrictions and the outlook for a difficult winter.
“The road to recovery rarely runs in a perfectly straight line, and new government restrictions will continue to hit JD Wetherspoon,” said Alastair Reid of Investec. “However, the company is well positioned to weather the storm and the results show that it is well positioned to capture a growing share of demand as it returns. We hope that the company comes out of the crisis more solidly ”.
