JD Wetherspoon (JDW.L) chairman Tim Martin has described the UK government’s advice to stay away from pubs and other venues over the coronavirus pandemic as a “tactical error.”
“The difference in keeping the hospitality industry open, even with reduced sales, is colossal,” said Martin, as hospitality leaders warned of mass closures and hundreds of thousands of job losses as they reacted to prime minister Boris Johnson’s announcement on Monday.
Martin suggested that the best path for the UK would be to admit that most people will get the virus, while protecting the elderly and sick, thereby building up group immunity.
He pointed to Wetherspoon sales which have been “positive in the last few weeks in spite of storms and health scares” as evidence that this position would be “in tune with the robust instincts of the nation.”
Martin highlighted the hospitality industry’s contribution to the UK economy, saying that the industry adds £120bn ($146.5m) a year in tax and provides 6 million jobs. Wetherspoon alone contributes £2m a day in tax, according to the company.
"Lockdown delays the inevitable and destroys the tax base at the same time, which will cripple the NHS and the economy,” Martin said.
“The board continues to plan partially mitigating actions. The company will announce its interim results on 20 March 2020, when a further update will be provided.”
Wetherspoon’s stocks sank 11.5% as the government’s announcement spooked investors.
Shares in other pub chains also nosedived as Marston’s (MARS.L) fell 14.1% and the City Pub Group (CPC.L) fell 14.6%. The City Pub Group also announced cuts in staffing, opening hours and director salaries, and is asking landlords for rent holidays.
The British Beer and Pub Association has written to Johnson, warning of an “existential crisis” for pubs and brewers that puts hundreds of thousands of jobs at risk. It wants a six-month freeze on company’s business rates and other tax bills.