Exeter-based JD Wetherspoon Plc boss Tim Martin has blamed the Government for causing soaring inflation after the pub company made a six-month pre-tax loss of £13m.
In a strongly-worded statement to investors Mr Martin said Westminster blew £400bn on Covid measures which was financed by the Bank of England printing money which, in turn, led to runaway inflation and higher taxes.
The Wetherspoon chairman lambasted politicians from all parties for implementing “draconian” restrictions, which created “lockdown-by-stealth” and pummelled the hospitality, travel, leisure and other sectors, and called lockdowns the main threat to the UK economy.
Like this story? Why not sign up to get the latest South West business news straight to your inbox
Mr Martin, who saw revenue fall by more than £100m across his pub chain in the second half of 2021 but nevertheless stressed they were now well staffed and stocked, said: “The Government is reported to have spent over £400bn on Covid measures, around nine times the annual defence budget. The expenditure has been financed by the creation of ‘new money’ by the Bank of England, which has led to significant inflation and higher taxes.”
He added: “Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses.
“The company is confident of a strong future if restrictions are avoided. The readiness of the leaders of all the UK's main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK's 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy."
Wetherspoon, which has pubs across the South West, saw revenue fall from £933m in the second half of 2020 to £807.4m in the same period last year - a dip of 13.5%. During the 26 weeks to January 23, 2022, like-for-like sales fell by 11.8% .
It meant that the company recorded a pre-tax loss of £13m, after exceptional items and the implementation of the new IFRS accounting standards, for the half year. In the same period in 2020 Wetherspoon made a profit of £35.7m.
Mr Martin said: " Following a traumatic two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks. As indicated above, trade for the last three weeks was 2.6% below the equivalent period in 2019, reflecting an improving trend. Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions.
"Inflationary pressures in the economy have been widely publicised. Nearly 70% of the company's properties are freehold, with interest rates fixed for the next decade. Most of the company's leasehold pubs have rent reviews which are fixed at levels below the current level of inflation. There is pressure on input costs from food, drink and energy suppliers, mitigated to an extent, by a number of long-term contracts. Overall, the company expects the increase in input prices to be slightly less than the level of inflation.”
