When companies postpone their annual results, it isn’t usually because they need a bit more time to cram in all the good news.
Pub chain Wetherspoons should have had its numbers out by now but instead pushed the financial statement back to the coming Friday. Given the storm clouds hanging over the pubs trade – what with curfews, regional “circuit breakers” and social distancing – it’s bound to be a more sombre affair than usual.
Typically, Wetherspoons confidently swats aside any obstacle that stands in its way.
The company is targeted frequently on social media with calls for a boycott, over anything from employment conditions to the pro-Brexit views of its loquacious founder-chairman, Tim Martin. The consequence is always the same – yet another year of barnstorming sales, based on the simple equation that most of its customers aren’t too bothered about what Martin says, as long as he’s prepared to sell them cheap food and beer. The people who boycott Wetherspoons are not, by and large, the people who ever went there very often.
This time, as the company has already indicated, will be different. The irresistible force of Spoons has collided with an immovable object in the form of a pandemic, heralding the impossible event – a stomach-churning loss.
Expect the same at fellow pub chain Marston’s, which also has numbers out this month and is even larger – if less high profile – than Wetherspoons, with an estate of 1,400 venues.
Indeed, expect the same at any hospitality group. Those that survive this crisis will emerge significantly weaker. We’ve already seen Greene King shut 79 pubs with 800 job losses, while Revolution bars announced a company voluntary agreement (CVA) likely to mean similar pain.
Given its recent success, a retrenchment along those lines seems almost inconceivable at Wetherspoons, but these days nothing is off the table and the delay in the results raises worrying questions.
Perhaps Martin just wanted a bit more time to craft one of his now-famous political diatribes. They have become a staple of results day at Spoons, often taking up more space than the results themselves.
Traditionally, at least in recent years, the diatribes have been about Brexit, but it seems likely that this year’s figures will be accompanied by long screeds about the government restrictions affecting hospitality, complete with annexes and links to scientific studies.
For once, Martin isn’t out on a limb alone. He’s sharing a windswept bough with most of his struggling industry, whose trade bodies have begged the government to rethink its sternest curbs or, if not, dip into its pocket for a bazooka-sized sector-specific bailout.
The 10pm curfew has eroded sales already diminished by social distancing and now conditions are set to get even worse. Holyrood has imposed tight temporary restrictions – banning booze sales and post-6pm restaurant outings. About 60 of Spoons’s 861 UK pubs are in Scotland, and more pain is to come, with similar restrictions imminent across the north of England.
According to number-crunchers at the property firm Altus Group, that could force the temporary closure of more than 7,000 pubs across the north, or one in five of all UK drinking establishments. Some will never reopen, although the government attempted to mitigate the economic blow on Friday with a package of measures for lockdown-affected businesses and their employees, including the reintroduction of the furlough scheme in all but name.
The impact of the new lockdowns won’t show up in Wetherspoons’ figures, which cover the period to the end of July, but they are bound to feature prominently in its outlook and any comments about trading since the financial year end.
The company has been such a reliable engine of growth that if it too is prophesying doom, then prospects will be much, much worse for less robust competitor chains and grimmer still for independent venues.
Barring some dramatic deus ex machina – a huge government bailout or a vaccine breakthrough – pubs are facing the worst pandemic outcome of any UK industry. Even Wetherspoons won’t be immune.