Wetherspoons Sales Still Down Sharply Year-On-Year
British pub operator JD Wetherspoon has said that its sales are still down sharply year-on-year, despite help from the UK government's subsidised meal scheme.
The company forecast a loss for the year and said that it is looking to seek waivers on its loans as it deals with the financial fallout of months of coronavirus-driven pub closures and subsequent social distancing measures.
Sales have been helped by the UK government's "eat out to help out" discount scheme, Wetherspoon said, and by the addition of extra seating outside.
However, sales are likely to fall further as the scheme winds down, Wetherspoon said, adding that the UK government should maintain lower value-added tax (VAT) on meals.
Britain temporarily cut VAT on spending on hotels, restaurants and tourist attractions last month to 5% from 20% to boost demand for services hardest hit by the COVID-19 lockdown.
"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," Wetherpoon said.
"What really matters now is how the business fares without the sales incentive and if it can avoid pushing up prices to help claw back some of the lost revenue from earlier this year," AJ Bell investment director Russ Mould said. "It cannot afford to upset customers who are already in a fragile state of mind."
Supermarkets, Job Cuts, Expansion Plans And Reopenings
Wetherspoon said that supermarkets have sucked up much of the pub industry's food and beer trade in the crisis.
The company said earlier this month that it will slash up to 130 jobs at its head office and scale back its expansion plans.
Wetherspoon said that 844 of its 873 pubs are now open, and that like-for-like bar and food sales were down 16.9% during the 44 days to August 16.