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Wetherspoon boss criticises Downing Street party after first-half loss

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·Business Reporter, Yahoo Finance UK
·3-min read
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Wetherspoon boss criticises Downing Street party after first-half loss
Wetherspoon boss Tim Martin (R) said members of the public were prevented from seeing friends and family, 'while the same rules were not observed at 10 Downing Street'. Photo: Henry Nicholls/pool/Reuters

The outspoken boss of pub chain Wetherspoon (JDW.L) has hit out at UK prime minister Boris Johnson and his team for “hypocrisy” over a drinks party during lockdown in 2020.

Tim Martin, who has been a public critic of the government’s handling of the coronavirus pandemic, said members of the public were prevented from seeing friends and family, “while the same rules were not observed at 10 Downing Street”.

He said the illegal event would not have happened if pubs remained open, and that if the attendees had been able to visit a pub there would have been a number of advantages.

These included experienced staff and highly trained managers being able to deal with the “high jinks” alleged to have occurred, he said, as well as CCTV cameras that could help with investigations.

Watch: Boris Johnson says ‘nobody told me’ Downing Street party broke lockdown rules

“In 2020, before vaccinations were available, COVID controls in pubs were superior to private parties, with screens, sanitisers, optimal seating layouts and so on,” he added.

Wetherspoon registered more than 50 million customer visits in the second half of 2020, when pubs were permitted to reopen, and had no outbreaks of the virus among customers, as defined by the public health authorities, during this time.

Read more: UK inflation hits 30-year high as cost of living squeeze looms

It came after a warning on Wednesday that the company would post a loss for the first half of the year thanks to the new Omicron variant running rampant across the country.

Like-for-like sales in the 25 weeks to 16 Jan fell 11.7% amid Plan B restrictions announced in December, and total sales slumped 13.3% compared to the same period the year before.

During the Christmas period, the government advised people to limit social contact, resulting in a surge of booking cancellations in the leisure and hospitality industry during what is usually the busiest time of the year.

“The uncertainty created by the introduction of Plan B COVID-19 measures makes predictions for sales and profits hazardous," Martin said. “The company will be loss-making in the first half of the financial year, but hopes that, with the ending of restrictions, improved customer confidence and better weather, it will have a much stronger performance in the second half.”

He also pointed to the government’s taxation system favouring supermarkets over pubs.

“Pubs pay 20% VAT on food sales, but supermarkets pay nothing. Pubs pay around 20 pence per pint of business rates, whereas supermarkets pay around 2 pence," he said.

Read more: UK's cheapest supermarket revealed

“The result is that supermarkets can afford to subsidise beer selling prices, using their tax advantage. The situation is crazy.”

He called on the UK government to rebalance the tax system as the pandemic comes to an end.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Omicron scares will likely have compounded recent trends, where the group’s older and more vulnerable clientele have been staying home. But we’ll have to wait until March to find out any further details, with today’s update giving little away.

“News today that UK inflation reached its highest point since 1992 means less disposable income for everyone. As wallets feel the ever tighter pinch of inflation, but many customers want to socialise again, the group's ‘pile it high sell it cheap’ approach should help it be more resilient. Punters may be more likely to favour its offerings over some of its more premium peers.”

Watch: What is inflation and why is it important?

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