Wetherspoon boss hits out at "erratic" government regulations as profits drop 133%
A UK pub chain has said that the government’s response to coronavirus has contributed to its profits dropping by more than 100 per cent.
Wetherspoon, which operates nearly 900 pubs across the country, saw a 133.3 per cent fall for the year ending 26 July, dropping from a profit before tax of £102.5m in 2019 to a loss of £34.1m.
The company also reported a 30.6 per cent drop in revenue, dipping to £1,262m from last year’s £1,818.8m.
It said that the losses were largely due to the UK’s lockdown, which lasted for approximately a quarter of its financial year.
Tim Martin, chairman of Wetherspoon, commented: “The lockdown was far longer than was necessary to achieve its stated objective of ‘flattening the curve’ so as to assist the health service.
“Before pubs reopened, a detailed and comprehensive operating plan for the hospitality industry was nevertheless agreed on among the government, parliamentary committees, UK Hospitality, civil servants and other interested parties.
“The regulations and guidelines reflected in the plan drastically reduced pub capacity, but were carefully thought out and had the backing of the industry, legislators, licensing officials, local authorities and the public.
“For the two months following reopening, it appeared that the hospitality industry, in difficult circumstances, was adapting to the new régime and was getting ‘back on its feet’, albeit in survival mode.
“It appears that the government and its advisers were clearly uncomfortable as the country emerged from lockdown.
“They have introduced, without consultation, under emergency powers, an ever-changing raft of ill-thought-out regulations - these are extraordinarily difficult for the public and publicans to understand and to implement.
“None of the new regulations appears to have any obvious basis in science.
“For example, a requirement for table service was introduced - which is expensive to implement and undermines the essential nature of pubs for many people - pubs have now become like restaurants.
“Customers can approach the till in a shop, but not in a pub - which is, in no sense, ‘scientific’.
“In addition, face-coverings, for which the health benefits are debatable, need not be worn while seated, yet must be worn to go to visit the bathroom - another capricious regulation. [Face coverings are mandatory in public spaces in the UK except when eating. Refusal to comply can be met with fines of up to £200.]
“The most damaging regulation relates to the 10pm curfew, which has few supporters outside of the narrow cloisters of Downing Street and SAGE meetings.
“This has meant that many thousands of hospitality industry employees, striving to maintain hygiene and social-distancing standards, go off duty at 10pm, leaving people to socialise in homes and at private events which are, in reality, impossible to regulate.
“In marked contrast to the consistency of the comparatively successful Swedish approach, which emphasises social distancing, hygiene and trust in the people, the erratic UK government is jumping from pillar to post and is both tightening and tinkering with regulations, so we are now in quasi-lockdown which is producing visibly worse outcomes than those in Sweden, in respect of both health and the economy.
“Risk cannot be eliminated completely in pubs, but sensible social-distancing and hygiene policies, combined with continued assistance and co-operation from the authorities, should minimise it.
“Like-for-like sales in the first 11 weeks have been 15 per cent below those of last year, with strong sales in the first few weeks, followed by a marked slowdown since the introduction of a curfew and other regulations, some of which are referred to above.
“The recent curfew and introduction of table service only have been particularly damaging for trade, depressing sales for customers who find it too much ‘faff’, at the same time as substantially increasing costs.
“As a result of recent changes in regulations, the outlook for pubs over the remainder of the current financial year is even more unpredictable than hitherto.
“The company has successfully adapted its business, over the last 41 years, to cope with widely different political and economic circumstances.
“We now employ over 40,000 people, 10,000 of whom are shareholders in the company, and are a major contributor to national income, paying approximately one pound in every thousand of treasury receipts in 2019 and in preceding years.
“However, the company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate - the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy.”
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