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More than 2,000 furloughed staff facing losing their jobs at pub chain Marston’s, as the Covid-19 economic crisis deepens.
In a statement to the City this morning, Marston’s blames the new restrictions on hospitality industry, which is says have damaged consumer confidence and undermined its efforts to reopen following the lockdown.
Marston’s, which owns 1,400 pubs, restaurants, cocktail bars and hotels in the UK, says its sales slumped by a third in the last year, but had been improving over the summer…. before the latest curbs on trading.
Sales were down 10% in the 13 weeks since it reopened after the lockdown, as consumer confidence “increased steadily” throughout July, August and into September. That’s partly thanks to the government’s Eat Out To Help Out campaign during August, and its VAT reductions on sales of food and non-alcoholic drinks.
But the latest restrictions – such as the 10pm curfew, and full table service – mean that Marston’s is now cutting back, affecting over 2,150 furloughed staff.
It tells shareholders that the latest restrictions have undermined consumer confidence and create uncertainty.
The introduction of these further restrictions and guidance affecting pubs is hugely disappointing in view of a lack of clear evidence tying pubs to the recent increase in infection levels, and our own data which suggests that pubs are effective in minimising risks. Very few incidences of COVID-19 infection have been reported in our pubs by employees or guests to date, supporting our view that socialising in pubs, where social distancing is enforced and hygiene standards are high, presents lower risks than in other non-regulated settings. Unlike many other retail settings, we committed to collecting Test & Trace data from the moment we were able to open.
And that means more than 2,000 furloughed staff face being laid off, with the government’s job retention scheme winding up at the end of the month.
Inevitably, and regrettably, recent restrictions will impact jobs. Since the start of the pandemic, our objectives have included protecting the health and livelihoods of our teams. Government support over the summer was vital, and around 10,000 colleagues have so far returned to work.
However, because of the recent additional restrictions, we have reluctantly concluded that around 2,150 pub-based roles currently subject to furlough are going to be impacted.
Furthermore, we have initiated a full review of overhead costs which will be concluded by the end of December. These decisions are difficult but are necessary due to the restrictions placed upon our business at this time.
Such cuts highlight why economists expect the UK jobless rate to surge this winter, having already hit a three-year high.
The latest swathe of Covid-19 restrictions are weighing on the financial markets again today.
European stocks are down in early trading, after France imposed tighter restrictions in eight cities and Northern Ireland announced a new mini-lockdown.
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