UK pub bosses have warned that 80 per cent of pubs will be in a “perilous position” over the crucial Christmas trading period because of coronavirus restrictions, putting tens of thousands at risk of permanent closure.
Tim Martin, chairman of the pub group JD Wetherspoon, said the government’s three-tier system of local restrictions, which will come into force when a nationwide lockdown in England ends on December 2, was “a form of lockdown by stealth” that would force almost half of its 870 pubs to close.
The government announced on Thursday that the whole of England except Cornwall, the Isle of Wight and the Isles of Scilly would be in the higher tier-2 and tier-3 levels, covering 98 per cent of the population. Under tier-2 and 3 rules, most pubs and bars will have to close and only be able to offer takeaway and delivery services.
“They’ve locked us down so they need to compensate us,” said Nick Mackenzie, chief executive of Greene King, which operates 2,300 pubs. “The grants and furlough are not enough.”
Peter Borg-Neal, chief executive of 28-strong Oakman Inns, said the restrictions were “disastrous” for the sector.
“It’s shocking — there is still no evidence that we are a big driver of this and yet we are the ones bearing the brunt,” he said.
Under tier-2 rules, pubs can open but only if they serve “substantial” meals. According to the British Beer and Pub Association, this means that almost 14,000 “wet” pubs in England that focus on serving drinks will have to stay closed.
The trade body added that a further 16,454 were in tier-3 areas, placing more than 30,000 pubs, 80 per cent of the total, in a “perilous position” over the coming months.
Wetherspoons said that opening pubs for takeaway was “unlikely to be a realistic proposition”.
On Wednesday, the BBPA and chief executives of the majority of the UK’s biggest pub companies sent a letter to the prime minister warning that 20,000 English pubs faced permanent closure unless the government provided grants ranging from £3,000 to £12,000 depending on official assessments of the value of each pub.
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It warned that the current grants of £1,300 a month were not enough even to cover basic fixed costs.
Mr Mackenzie said that while Greene King would open as many of its pubs as possible, none would make any money but would instead be “making less of a loss”.
He added that while larger pub groups should be able to cope with the loss of Christmas trade, which can account for up to 40 per cent of annual sales in some pubs, the tier system would “decimate the smaller operators”.
Both Mr Mackenzie and Phil Urban, chief executive of pub group Mitchells & Butlers, said that uncertainty over Christmas trading would also put pressure on supply chains and that festive food menus would be reduced.
Mitchells & Butlers became the latest pub group to announce job cuts on Thursday, revealing it had laid off 1,300 employees since October. Greene King, Fuller’s, Marston’s, Young’s and the City Pub Group have cut almost 4,500 jobs between them over the same period. Wetherspoons has already lost about 550 jobs and Mr Martin said he could not rule out further cuts.
The industry has called on the government to reinstate a job retention bonus, which paid companies £1,000 for each employee they kept on until January but was removed following the extension of the furlough scheme until March.
Simon Emeny, chief executive of Fuller’s, said that for his company, the value of the job retention scheme was £4m — equivalent to the group’s cash outflow while all its pubs were closed.
Mr Emeny added that he had been “reassured by government” that restrictions on the sector would lift in March. “That will be absolutely critical for us to operate properly but also as evidence that we can trust government,” he said.