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Marks & Spencer is planning for potential temporary store closures and the pub chain owner JD Wetherspoon warned that sales are plummeting as the coronavirus continues to hammer high street businesses.
M&S said it is seeing “substantial declines” in its clothing and home business as shoppers stay at home, and it is redeploying a “significant” number of staff to support its supermarket business.
“It is too early to make any reasonable forecast for revenues in the next financial year but we are planning on the basis of a prolonged downturn in demand for clothing and home,” the company said. “We are preparing for the contingency that some stores may have to close temporarily.”
The company, which scrapped its dividend and warned that it might miss its lowest profit-guidance target, also said that it was not benefiting as much from panic buying as the major supermarket chains.
“We have benefited on a small scale as customers stock up but our heavy bias to chilled and fresh [food] means we are not seeing the forward-buying uplift experienced by the major grocers.”
Meanwhile, JD Wetherspoon, which operates 874 pubs, said its sales declined 4.5% in the week to 15 March. Following the prime minister’s advice on Monday to avoid pubs, sales have declined at a “significantly higher rate”.
The company has cut its dividend and stopped capital expenditure, which, along with the government’s business rates holiday and credit guarantee faculties, it says will provide sufficient liquidity to “maintain operations at a substantially lower level of sales”.
The Bank of England on Friday said it would cancel annual financial stress tests on banks to allow them to concentrate on lending to help businesses through the crisis.
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