JD Wetherspoon expects sales to fall once Eat Out to Help Out scheme ends
Pub chain JD Wetherspoon today said it expects its sales to fall once the government subsidised Eat Out to Help Out scheme finishes.
The scheme gives diners 50 per cent off up to £10 a head on meals bought at participating outlets on every Monday, Tuesday and Wednesday throughout August.
The business owners must then claim the money back from the government.
Wetherspoon today said it “expects a period of more subdued sales once the scheme for subsidised early-week meals and drinks ends”.
The pub chain said its like-for-like bar and food sales are down 16.9 per cent for the 44 days to 16 August.
“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,” it said.
The initiative was implemented by the Treasury in a bid to reinvigorate the economy, and the hospitality sector in particular, after it was ravaged by the lockdown.
Around 80 per cent of companies based in the hospitality sector were closed in April, with more than 1.4m staff furloughed. The Treasury said it was the hardest-hit sector until it was allowed to reopen on July 4.
As of last week more than 35m claims had been submitted to the government for meals that have been discounted under the programme.
Wetherspoon reopened all its pubs in England, Scotland and Wales as soon as permitted, barring a small number of pubs in airports and train stations.
The company said 844 pubs of its pubs are now open, out of a total of 873.
Wetherspoon said it “remains in a sound financial position”. It said net debt at the end of the last financial year is estimated to have been about £825m.
The company said it has received a waiver of bank covenants for April and July and is going to ask its lenders for waivers for the current financial year “in due course”.
It said it raised £141m in a share placing and received a £48.3m loan under the government coronavirus large business interruption loan scheme (CLBILS).
Wetherspoon chair Tim Martin said: “The company expects to make a loss for the year ending 26 July 2020, both before and after exceptional items. Some of these exceptional items will be related to the covid pandemic.”