Yahoo Finance Eat Out to Help Out is propping up Wetherspoon during COVID-19
JD Wetherspoon (JDW.L) has seen a “rapid acceleration” of sales since the Eat Out to Help Out scheme was introduced.
The major UK pub chain said in a trading update on Monday that while like-for-like bar and food sales were down 16.9% for the 44 days to 16 August, “sales have gradually improved, with a rapid acceleration recently, largely due to subsidised food, coffee and soft drinks in the early part of the week.”
The Eat Out to Help Out scheme gives diners a 50% discount at participating restaurants and pubs on Mondays, Tuesdays and Wednesdays throughout August, to a maximum of £10 ($13.10) per head. It is designed to encourage people to help the hospitality industry recover from the coronavirus crisis.
Pubs, restaurants, cafes, and other establishments that serve food can take part in the programme. It is part of chancellor Rishi Sunak’s "Plan for Jobs” and aims to protect 1.8 million jobs in the hospitality sector.
Wetherspoon added that extra seating outdoors had boosted sales, praising landowners, landlords and local authorities for being “flexible.”
Wetherspoon has opened 844 of its 873 pubs, with only a small number of development sites and pubs in airports and stations still closed.
The company said it expected “a period of more subdued sales” once the scheme created by chancellor Rishi Sunak finishes at the end of August.
Official data last week showed more than 35 million discounted meals had been claimed across the UK in the first two weeks of the government’s Eat Out to Help Out scheme. More than 85,000 eateries have now signed up, including high street chains as well as thousands of small independent businesses.
"The company expects to make a loss for the year ending 26 July 2020, both before and after exceptional items. Some of these exceptional items will be related to the COVID pandemic," said Wetherspoon’s chairman Tim Martin.
Meanwhile he used its trading update to attack COVID-19 lockdowns, the tax treatment of pubs and the media.
He also claimed other environments “seem to have higher levels of infection” than pubs like Wetherspoon’s. The company reported five confirmed COVID-19 cases before lockdown, and 24 since pubs re-opened in early July.
"Risk cannot be eliminated completely in pubs, but sensible social distancing and hygiene policies, combined with continued assistance and cooperation from the authorities, should minimise it,” he added.
