Spoons boss spells out huge battle to regain pub profits
PUBS are facing “a momentous challenge” to get drinkers to return in the wake of the Covid crisis, the boss of industry giant JD Wetherspoon warned.
Tim Martin said many expected a post-lockdown boom, with people fed up of “enforced cabin fever” embarking on a celebratory spree.
“But the reality has, in contrast, been a painstakingly slow recovery in sales,” he said, combined with a jump in costs for many pubs.
Writing in the firm’s annual report, Mr Martin added: “During lockdown, dyed-inthe-wool pub-goers, many for the first time, filled their fridges with supermarket beer
– and it has proved to be a momentous challenge to persuade them to return to the more salubrious environment of the saloon bar.”
Research published in April by consultants CGA and AlixPartners revealed more than 9,000 pubs, restaurants and other licensed premises had shut down during the Covid crisis.
Trade magazine The Morning Advertiser has warned seven in 10 pubs could shut for good this winter.
Mr Martin’s comments came as JD Wetherspoon revealed that losses in the year to the end of July fell from £167million to £30.4million. Before the pandemic, the company made a £132million profit. Sales rose from almost £773million to over £1.7billion but still behind the more than £1.8billion in 2019.
However, takings for the first nine weeks of the financial year were 10.1 per cent higher than the same period last year. It is selling off 32 pubs that are close to its others.
The annual report highlighted the near £663million of tax the firm paid last year, of which almost £288million was from VAT and £156million in alcohol duty.
Mr Martin said it was “hard to make” firm predictions on how the company would perform, with the biggest threat the risk of further Covid lockdowns. He also pointed to increases in everything from labour and repair costs to energy bills.
However, the firm managed to fix interest rates on its borrowing at low levels right through to 2031.
Wetherspoon’s share price jumped yesterday but is down around 50 per cent since the start of this year.