JD Wetherspoon shares fell almost 20% after the UK pub chain collapsed to its first loss in 36 years.
As boss Tim Martin warned that the “ erratic ” coronavirus restrictions were hammering the hospitality industry and the economy in general, his company saw a 30% drop in annual revenue to $ 1.3 billion.
The upheaval tipped Wetherspoons to a loss of 34.1 million for the year as of July 26, from a profit of 102.5 million in 2019, after the pandemic temporarily closed its sites and caused costs to soar.
It was the first time he had gone into the red since 1984, the year after his start, when he recorded a loss of 7m.
The shares fell 19.4%, or 186.5 pence, to 773.5 pence, reducing its market capitalization from 1.2 billion to 931 million.
And Martin warned he couldn’t help but cut jobs for longer, saying the latest government restrictions made the future “ even more unpredictable than so far ” for pubs.
At a press conference, the 65-year-old has repeatedly criticized the rules for ‘bad thinking’, citing investor Warren Buffett, musician Bob Dylan and former Supreme Court Justice Lord Sumption .
He said venues suited for social distancing after lockdown measures were relaxed in the summer, but since then ministers have panicked and ‘started shooting from the hip’ with changes that didn’t had no “ clear scientific basis ”.
The 10 p.m. curfew and rules limiting pubs to table service had been “ particularly damaging, ” Martin said, as they drove up costs and put off customers who “ find it too difficult ” .
He claimed hospitality businesses were being unfairly targeted, insisting that there had been only one case of the virus at 116 of Wetherspoons locations, while 670 had no cases.
“You’d think if it ripped apart the ad world, you wouldn’t have just had 116 ads with one,” Martin said. “It doesn’t make sense that supermarkets are treated more leniently than pubs, because pubs generate far more jobs per pint or meal than supermarkets, as well as much higher tax levels.
“Pubs also make an important contribution to the social life of many communities and provide better visibility and control over those who consume alcoholic beverages.
Martin said he was “ not in any way denigrating Covid-19 ”, adding that it was “ extremely serious ”. He said: “The truth is you can certainly catch Covid in a pub, but that is not the center of transmission.”
His warning came as the British Beer and Pub Association said ‘survival is dangerously at stake’ for thousands of Lancashire pubs, which have joined Liverpool in the highest tier of tier three restrictions.
There were around 1,200 pubs employing 23,000 people in Lancashire and another 1,000 employing 21,000 in the LiverpoolCity area. Emma McClarkin, the association’s boss, said the changes “would completely kill the business model” of hundreds of pubs.
She added: “ Support needs to be made available to brewers and businesses in the broader supply chain, who are also seeing their custom taken away overnight.
“We desperately need it if we are to make our local pubs survive.
AXIS FALLS ON 1000 JOBS ON BIGGER STREET
Another thousand store workers are facing the ax after Pret a Manger and clothing retailer Edinburgh Woolen Mill announced massive layoffs.
The sandwich chain Pret said it would close six more stores and cut around 400 jobs after its recovery slowed amid new restrictions and the rise in the number of Covid-19 cases.
It comes just two months after losing 2,800 employees and shutting down 30 sites. It has 389 stores in the UK, including 266 in London. Pret said his recent ‘setback’ in commerce was partly due to harsh conditions in the capital, after advising workers to work from home.
Edinburgh Woolen Mill, which also owns Peacocks and Jaeger, has confirmed it is cutting 600 jobs and closing 50 stores.