Wetherspoon warns of annual loss as pandemic hits pubs trade
WETHERSPOON has warned that the coronavirus crisis will drag it to an annual loss after sales plunged following its reopening last month.
The pub chain told investors that like-for-like bar and food sales are down 16.9 per cent for the 44 days to August 16, compared to the same period last year.
The group said it now reopened 844 of its 873 pubs, after shutting all sites in March as a result of the virus.
Northern Ireland-born Tim Martin, founder of Wetherspoon, said the sales slump means it expects to post a loss for the year to July 26.
"Sales have gradually improved, with a rapid acceleration recently, largely due to subsidised food, coffee and soft drinks in the early part of the week," the company said in a statement.
It said sales have also been boosted by an increase in outdoor seating, while it has also benefited from "extremely flexible" landlords, local authorities and licensing authorities.
However, it stressed that its expects a "period of more subdued sales" once the Eat Out to Help Out scheme ends at the end of August.
Mr Martin said: "Wetherspoon had five positive tests for Covid-19 among its 43,000 staff before lockdown and has had 24 positive tests since pubs reopened on July 4, since reopening, the amount of testing has substantially increased.
"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".
Russ Mould, investment director at AJ Bell, said: "It's understandable that Wetherspoon is making a big song and dance about how it is following social distancing guidelines as it wants the public to feel that its pubs are safe to visit.
"Guidance that it will report a loss in its most recent financial year won't be a surprise given the considerable disruption to trading.
"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."
Shares in the company moved 1.6 per cent higher to 989.5p in early trading on Monday.