JD Wetherspoon pushed to annual loss
The company reported a 16.9% drop in like-for-like sales for the 44 days to 16 August the period, which followed the reopening of pubs on ‘Super Saturday’ earlier this summer (4 July) after months of closure.
It expects an annual loss for the year ended on 26 July both before and after exceptional items relating to the pandemic. However JDW said it “remains in a sound financial position” with net debt at the end of the last financial year estimated to have been about £825m.
Sales have benefited from the Government’s Eat Out to Help Out scheme, with food, coffee and soft drinks in the early part of the week having gradually improved, JDW outlined in a trading update.
Subdued sales ahead
“The company nonetheless expects a period of more subdued sales once the scheme for subsidised early-week meals and drinks ends,” it said.
This comes as leading voices in the pub sector have called on the Government to extend the discount meals initiative into the autumn.
JDW has reopened the majority of its 873 pubs with 844 back in business. Some sites in airports and train stations have remained closed.
Two new pubs, in Crossgates, a suburb of Leeds and in Kingswinford in the West Midlands, were also opened earlier this summer.
The update praised landlords and local authorities for being “extremely flexible” in accommodating additional outside space and said this extra seating had helped sales.
JDW boss Tim Martin used the update to argue for tax equality between pubs and supermarkets, pointing to the temporary VAT reduction of 5% on food sales in the on-trade.
He said: “It makes no sense for supermarkets, often operating outside town centres, to have a tax advantage.
“If this major step towards tax equality is maintained in the long term, it will result in a significant increase in investment and employment in the on-trade.”
Minimising risk
Martin said the company had 24 positive tests for Covid-19 among its staff since reopening and pointed to an increase in testing across the country.
Newspaper articles detailing allegations of JDW sites failing to enforce of Covid-secure protocols like contact tracing and social distancing were dubbed “irresponsible and untrue” in the trading report.
“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,” Martin said.
The pubco boss reiterated his thoughts that there was not strong evidence to show pubs were a dominant setting for coronavirus transmission.
“Other environments seem to have higher levels of infection. For example, one sandwich-making facility in Northampton had 287 positive tests among its workforce, and one farm in Hereford had 77 cases,” he added.
