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Fri 1st Oct 2021 - Wetherspoon LFLs below 2019, planning to appoint worker directors
Wetherspoon LFLs below 2019, planning to appoint worker directors: JD Wetherspoon has reported like-for-like sales are still below 2019 levels. The company reported sales down 38.8% to £772.6m in the 52 weeks ended 25 July. It made a loss before tax of £154.7m (2020: loss of £34.1m). Chairman Tim Martin said: “Like-for-like sales in the first nine weeks of the current financial year were 8.7% lower than the same weeks in August and September 2019, before the pandemic started. In the last four weeks of the period, like-for-like sales were minus 6.4%. Excluding airport pubs, where like-for-like sales declined by 47.3%, like-for-like sales declined by 7.1% in the first nine weeks, and by 4.9% in the last four. Total employee numbers averaged 39,025 in the financial year, which increased to 42,003 for the week ending 20 September 2021. On average, Wetherspoon has received a reasonable number of applications for vacancies, as indicated by the increase in employee numbers, but some areas of the country, especially ‘staycation’ areas in the West Country and elsewhere, have found it hard to attract staff. During the pandemic, the pressure on pub managers and staff has been particularly acute, with a number of nationwide and regional pub closures and reopenings, often with very little warning, each of which resulted in different regulations. In the last year, the country moved, in succession, from lockdown, to ‘Eat Out to Help Out’, to curfews, to firebreaks, to pints with a substantial meal only, to different tier systems and to further lockdowns. Pub management teams, and indeed the entire hospitality industry, had an almost impossible burden in trying to communicate often conflicting and arbitrary rules to customers. One of the most surprising statistics has been the apparent low level of transmission of the virus in pubs. For example, in more than 50 million customer visits, recorded in the second half of 2020, before the introduction of vaccines, Wetherspoon had zero outbreaks of the virus, as defined by the health authorities, among customers. Yet there has clearly been a high level of transmission in some other environments, including private parties, weddings, production facilities, university halls of residence and homes. Pubs have been at the forefront of business closures during the pandemic, at great cost to the industry – but at even greater cost to the Treasury. In spite of these obstacles, Wetherspoon is cautiously optimistic about the outcome for the financial year, on the basis that there is no further resort to lockdowns or onerous restrictions. The biggest threat to the pub industry, and also, inter alia, to restaurants, theatres, cinemas, airlines and travel companies, relates to the precedent set by the government for the use of lockdowns and draconian restrictions, imposed under emergency powers. This threat, which is also a threat to civil society and democracy, has been regularly articulated by many commentators, including the former Supreme Court judge Lord Sumption.” The company added: “Like-for-like sales in the first nine weeks of the current financial year were 8.7% lower than the same weeks in August and September 2019, before the pandemic started. In the last four weeks of the period, like-for-like sales were minus 6.4%. Excluding airport pubs, where like-for-like sales declined by 47.3%, like-for-like sales declined by 7.1% in the first nine weeks, and by 4.9% in the last four. Total employee numbers averaged 39,025 in the financial year, which increased to 42,003 for the week ending 20 September 2021.”

Wetherspoon to appoint ‘worker directors’: JD Wetherspoon is planning to appoint experienced pub or area managers to its board. The company stated: “Wetherspoon has sought to counteract the negative effects of corporate governance by encouraging long-serving directors, and is planning the promotion of a number of ‘worker directors’, who are experienced pub or area managers, to board positions. It is hoped that the creation of more experience of the ‘front line’ at board level will help to protect the DNA of the business for future generations. Almost all thoughtful investors and commentators understand that it is important to retain the architecture and culture of successful businesses, characteristics which have usually been developed over many years – and are often referred to as the ‘DNA’ of a company. Unfortunately, the UK corporate governance system, in practice, has little regard for DNA, which is often diluted, or even destroyed, by frequent changes of directors, and by under-representation of executives and workers. As Wetherspoon has previously argued, the pattern of a low level of executive representation and non-executives who stay, on average, for short tenures, is bound to have a deleterious effect on DNA. In the pub industry, in recent decades, companies like Fuller’s and Young’s, which have generally had ‘non- compliant’ boards, have fared far better than their larger PLC brethren- many of which have disappeared- with their ever-changing rota of directors.”

Updated Premium Database of Multi-Site Companies released today at midday, 71 companies being added: A total of 71 new multi-site companies, operating 412 sites, have been added to the next edition of the Propel Premium Database of Multi-site Companies, which will be released today (Friday, 1 October), at midday. The updated Propel Multi-Site Database, which is produced in association with Virgate, includes international growth concepts making their UK debut, expanding vegan brands, regional coffee operators and a number of brands growing through franchise. Premium subscribers will also receive a 6,100-word report on the new additions to the database. The comprehensive database is updated monthly and provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. Alongside this, Premium subscribers will also receive the third edition of the New Openings Database, which is produced in association with StarStock, on Wednesday (6 October), at midday. It focuses on newly announced openings and upcoming launches in the sector and is updated every month. Premium subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out plus regular video content and regular exclusive columns from Propel insights editor Mark Wingett. In this week’s Premium Opinion column, which will be sent to subscribers on Friday (1 October) at 5pm, Phil Eeles, co-founder of Honest Burgers talks about “shaking the tree” of the whole business in an attempt to not become a chain, while Mark Wingett looks back at the key issues of the week. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The regular single subscription rate of £395 plus VAT for operators and £495 plus VAT for suppliers remains the same. To subscribe, email jo.charity@propelinfo.com.

EG Group and Ole & Steen announce pay increases for staff: Forecourt and roadside operator EG Group and Danish baker Ole & Steen have become the latest sector businesses to announce pay increases for their staff. EG Group, the owner of Leon, said it had increased hourly rates of pay for its 10,500 employees in the UK in “recognition of their hard work and commitment throughout the pandemic”. It said that the increased rates of pay will apply across all of EG’s petrol filling stations and foodservice brands in the UK, effective from today (1 October 2021). Every colleague aged 18 and above will now be paid a minimum of £9.50 per hour. More experienced colleagues, such as team leaders and supervisors, will be paid a minimum of £10.00 per hour. These changes represent an average hourly wage increase of more than 5%. Additionally, EG, which earlier this week acquired 52 KFC UK restaurants from Amsric Group, said it was further investing in more than 200 existing colleagues ‒ representing over a six-fold increase on its inaugural apprenticeship trial ‒ who will embark on various apprenticeship programmes across the business. Mohsin Issa and Zuber Issa, co-founders and co-chief executives of EG Group, said: “Our colleagues have pulled out all the stops and been nothing short of heroic during often very difficult times since the start of the pandemic. It is due to their hard work and dedication that EG has continued to be a growth business, performing strongly over the past 12 months. We are grateful to each and every one of them for their contributions and are therefore making a total reward package available to them which we believe is amongst the best in the country.” At the same time, Ole & Steen said it had increased its team member pay to £10.35. The company said: “Recent months have been the most challenging our industry has ever faced. As we aspire to be ‘a better bakery for all’, we recognise that our store teams are at the heart of this. As a reflection, we have increased our team member pay to £10.35 and awarded all of our salaried management teams a 5% pay rise. This is our way of saying thank you and to acknowledge all they have done for our customers. We are proud to be opening new bakeries across London and have created an industry-leading package to support our teams as they join us on this journey.”

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