UK pub group JD Wetherspoon has hit out at the British government’s latest coronavirus restrictions, warning that profits will suffer in “a lockdown by stealth”.
In a trading update on Monday, the company said “radical changes of direction” from the government with the introduction of new rules last week would hurt trade and customer sentiment.
The government’s “plan B” would likely affect Wetherspoon’s first-half results, which may now be lossmaking or marginally profitable, the company added.
Shares in the company fell just over 4 per cent to 831p. Wetherspoons operates a number of pubs and hotels in Republic in Dublin, Cork and Carlow.
Under the measures announced by Prime Minister Boris Johnson last week, the legal requirement to wear face masks has been extended, Covid-19 passports or negative lateral flow tests introduced for large events and a work from home recommendation were brought in from Monday.
Social distancing
Tim Martin, Wetherspoons’ founder and chair, said there had been no outbreaks of Covid among customers and that pubs were “usually a bastion of social distancing”.
“For reasons best known to themselves, perhaps in order to encourage more vaccinations, the UK government and its advisers are creating an entirely different and more frightening impression of the variant, which appears to be at odds with the South African experience,” he said.
The country was heading towards “a lockdown by stealth”, he added.
The government last week ruled out new financial support for companies, including hospitality and retail businesses that could lose crucial sales over the Christmas period.
The hospitality industry is far from a recovery to pre-pandemic trading, despite tax breaks. Until next March, hospitality, leisure and retail companies can secure business rates relief at 66 per cent but capped at £2 million per business.
Sales across restaurants, bars and hotels in the three months to the end of September were 10 per cent down on the same period in 2019, according to industry tracker CGA.
In November, Wetherspoons warned that fewer older, “cautious” customers were returning to its pubs. Sales in the 15 weeks to November 7th were down 8.9 per cent compared with the record turnover it achieved in the same period in 2019. - Copyright The Financial Times Limited 2021
