Yahoo Finance Pub chain Marston's blames new curbs as it axes 2,150 furloughed staff
More than 2,000 furloughed workers at Marston’s (MARS.L) pubs are set to lose their jobs, as the UK pub and brewing company blamed new coronavirus restrictions for cutting staff numbers.
The company’s chief executive Ralph Findlay said job losses had been made “inevitable” by new curbs on pubs’ ability to operate.
It comes after the UK government imposed a 10pm curfew, table service and face masks on the industry, as well as the rule of six and a growing wave of further regional restrictions to curb the virus’ resurgence.
The UK government’s furlough scheme, subsidising wages for staff employers are struggling to keep on, is also due to end this month. The job cuts come in spite of a new job support scheme which will replace it, which has been criticised as less generous to employers and staff alike.
“The additional restrictions which have been applied across the UK most recently present significant challenges to us and will make business more difficult for a period of time,” said Findlay.
“I very much regret that the consequence of this is that the jobs of around 2,150 of our colleagues will be impacted, but it is an inevitable consequence of the limitations placed upon our business.”
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The company did not rule out making further cuts in the near-future, with Findlay adding: “We will be looking at our cost base further in the coming weeks.”
The company said its sales over the 13 weeks to 3 October had been down 10%, with September sales deteriorating compared to August.
In a year-end trading update published on Thursday, it said it had outperformed the UK pub sector as a whole, however. This reflected “the benefits of our balanced pub estate of wet-led and food-led pubs which are predominantly suburban, and community based, with limited exposure to city centres and only three pubs in central London.”
But it said group sales for the full year to 3 October were still down 30% year-on-year to £821m.
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Pub sales took the hardest hit, down 34% mainly due to closures between March and July, as well as the sale of 168 pubs. Its brewing arm, Marston’s Beer Company, saw sales slide 22%, with the decline in pub and bar revenue offset partially by higher sales in the off trade.
The pub chain also confirmed its plan to merge its brewing operation with Carlsberg (CARL-B.CO) in a joint venture would complete at the end of the month, after it was approved by UK competition regulators last week.
The Competition and Markets Authority (CMA) on Friday said it had concluded that the combination would not materially damage the beer and pubs markets, despite handing the combined entity a 14% share of the beer market.
Marston’s is known for ales such as Hobgoblin and Pedigree, while Carlsberg is best-known for its eponymous Danish lager.
Marston’s shares were trading 2.6% lower after the announcement.
