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JD Wetherspoon boss attacks COVID-19 restrictions as pub chain slumps to loss

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·4 min read
A member of bar staff wearing PPE (personal protective equipment) in the form of a face mask, pours drinks inside the Wetherspoon pub, Goldengrove in Stratford in east London on July 4, 2020, as restrictions are further eased during the novel coronavirus COVID-19 pandemic. - Pubs in England reopen on Saturday for the first time since late March, bringing cheer to drinkers and the industry but fears of public disorder and fresh coronavirus cases. (Photo by Tolga Akmen / AFP) (Photo by TOLGA AKMEN/AFP via Getty Images)
A member of bar staff wearing PPE (personal protective equipment) in the form of a face mask, pours drinks inside the Wetherspoon pub, Goldengrove in Stratford in east London on July 4, 2020. Photo: TOLGA AKMEN/AFP via Getty Images

The boss of JD Wetherspoon (JDW.L) has criticised the governments handling of the COVID-19 crisis, as the pub chain announced its first annual loss in almost 40 years.

Wetherspoon blamed the performance the COVID-19 pandemic and the government’s response, saying lockdown and the 10pm curfew have had a devastating effect on business.

Tim Martin, chairman and founder of JD Wetherspoon, said the government had introduced “an ever-changing raft of ill-thought-out regulations” in recent months.

“These are extraordinarily difficult for the public and publicans to understand and to implement,” Martin said in a statement. “None of the new regulations appears to have any obvious basis in science.

“For example, a requirement for table service was introduced — which is expensive to implement and undermines the essential nature of pubs for many people — pubs have now become like restaurants.

“Customers can approach the till in a shop, but not in a pub — which is, in no sense, 'scientific'.”

MANCHESTER - SEPTEMBER 25: A poster on the wall of a Wetherspoon pub advertises 'Sunak's Specials' drinks in honour of British Chancellor of the Exchequer Rishi Sunak on September 25, 2020 in Manchester, United Kingdom. (Photo by Christopher Furlong/Getty Images)
A poster on the wall of a Wetherspoon pub advertises 'Sunak's Specials' drinks in honour of British Chancellor of the Exchequer Rishi Sunak on September 25, 2020 in Manchester, United Kingdom. Photo: Christopher Furlong/Getty Images

The broadside came as Wetherspoon revealed a slump in sales and profits over the last year. Sales fell 30% to £1.26bn ($1.62bn) in the 12 months to the 26 July. The company fell to a pre-tax loss of £34.1m in the period, down from a profit of £102.5m in 2019.

The performance marks the first per-tax loss for the business since 1984.

When exceptional costs are factored in, JD Wetherspoon lost £94.8m. The pub chain faced exceptional costs of £29.1m linked to COVID-19. Costs include investment in safety measures at its pubs and wasted food and drink while sites were closed.

Shares in the company slumped over 12%.

JD Wetherspoon shares slumped on the results. Photo: Yahoo Finance UK
JD Wetherspoon shares slumped on the results. Photo: Yahoo Finance UK

Martin said sales picked up over summer after pubs were allowed to reopen, but have since tailed off due to the introduction of a 10pm curfew for hospitality businesses last month.

“The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much 'faff', at the same time as substantially increasing costs,” Martin said.

Sales over the 11 weeks since the end of July are 15% below where they were last year.

Martin attacked the curfew policy, arguing pubs are not a major source of transmission for COVID-19. He said 429 Wetherspoon staff — around 1% of the company’s total employees — had tested positive for the virus since reopening. Most cases appeared to be linked to “contacts outside of work,” Martin said, and the company was not aware of any “transfer of the virus from staff to customers or vice versa - or among customers”.

Conservative Party leadership candidate Boris Johnson, left, reacts with Tim Martin, Chairman of JD Wetherspoon, during a visit to Wetherspoons Metropolitan Bar in London, Wednesday July 10, 2019. (Henry Nicholls/Pool Photo via AP)
Tim Martin, chair of JD Wetherspoon, with then Conservative Party leadership candidate Boris Johnson during a visit to Wetherspoons Metropolitan Bar in London, Wednesday July 10, 2019. Photo: Henry Nicholls/Pool Photo via AP

The pressure on Wetherspoon’s businesses has forced it to cut 108 jobs from its head office. The chain is also consulting on job losses at its airport locations.

“As a result of recent changes in regulations, the outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto,” Martin said.

“The company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy.”

Martin called on the government to adapt rules closer to those of Sweden, where restrictions on daily live have been markedly looser throughout the pandemic.

“The erratic UK government is jumping from pillar to post and is both tightening and tinkering with regulations, so we are now in quasi-lockdown which is producing visibly worse outcomes than those in Sweden, in respect of both health and the economy,” Martin said.