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COVID curbs threaten UK economy, Wetherspoons says, as plunges to loss

Aakash B and Paul Sandle
·2-min read
Greenall's Wild Berry pink gin is seen in a photo illustration in London
Greenall's Wild Berry pink gin is seen in a photo illustration in London

By Aakash B and Paul Sandle

LONDON (Reuters) - J D Wetherspoon <JDW.L> accused the British government of panicking and "shooting from the hip" with new coronavirus restrictions it said could damage the entire economy, after the pubs group reported its first annual loss since 1984.

Pubs, restaurants and other leisure businesses were ordered to shut early across England last month, and the government this week introduced a three-tier system that requires pubs and bars in areas of "very high" infections to close.

Wetherspoons, which along with other hospitality firms had been recovering before the new system came into effect, said like-for-like sales in the first 11 weeks of its new financial year were down 15%, compared to a 30% fall for fiscal 2019-2020.

The pub group, run by chairman Tim Martin, an outspoken critic of coronavirus restrictions, reported a 34 million pound ($44 million) pretax loss for the year to July 26, versus a profit of 102 million a year earlier.

"The current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy," Martin said.

He said trade had picked up after a slow start when pubs re-opened in July, helped by the "sensational" success of the government-funded "Eat Out to Help Out" scheme in August and cuts in sales tax by British finance minister Rishi Sunak.

Wetherspoons cut some beer prices under the banner "Sunak's Specials" and offered food deals called "Dishi Rishi".

But when COVID cases started to rise, the government "panicked and started using emergency powers and shooting from the hip", Martin said.

"We've had a palette of ever-changing regulations since then; people find it very hard to understand and live with."

Shares in Wetherspoon were down 14% to 822 pence at 1230 GMT after it announced a further 108 job cuts.

In August, it said it would cut up to 130 jobs at its head office and last month added that 400 to 450 airport employees could lose their jobs as it deals with depressed demand.

This follows Marston's <MARS.L> announcement on Thursday of up to 2,150 job losses, and warnings from pub bosses across northern England that the latest round of restrictions will wipe out their businesses.

Martin said sales of drinks that appeal to younger people had risen as a proportion of the total, with shooters and cocktails overtaking real ale.

"The nightclub crowd, how desperate must they be to go to Wetherspoons," he said. "And having to social distance at the same time."

(Reporting by Paul Sandle in London, Aakash Jagadeesh Babu and Yadarisa Shabong in Bengaluru; Editing by Patrick Graham, Alexander Smith and Mark Potter)