Home Business News Wetherspoon braces for end of consumer spending incentive

Wetherspoon braces for end of consumer spending incentive

by LLB Editor
24th Aug 20 10:42 am

Pubs, restaurants and cafés have been given a lifeline by the Help Out to Eat Out scheme during August, with many leisure companies reporting a strong pick-up in sales as a result of the Government initiative.

Sadly, there are growing fears that the hospitality sector will see a sharp downturn in sales activity once the money-off scheme ends on 31 August.

Russ Mould, investment director at AJ Bell, said: “It was designed to encourage people to get out of their homes and start spending money on meals and drinks in leisure establishments. That certainly seems to have worked, yet the great unknown is how many people will continue to eat out once the discount ends.

“Wetherspoon is cautious about the outlook for sales from September onwards, and other hospitality operators have echoed similar thoughts. One could argue that if Wetherspoon is concerned, others should really be worried, as its low-priced menu of food and drink puts it in a strong position to attract cash-strapped consumers.

“Value-led operators are arguably better placed to get through the crisis as the public will be paying a lot closer attention to their spending patterns given a backdrop of growing unemployment.

“It’s understandable that Wetherspoon is making a big song and dance about how it is following social distancing guidelines as it wants the public to feel that its pubs are safe to visit.

“Guidance that it will report a loss in its most recent financial year won’t be a surprise given the considerable disruption to trading. What really matters now is how the business fares without the sales incentive and if it can avoid pushing up prices to help claw back some of the lost revenue from earlier this year. It cannot afford to upset customers who are already in a fragile state of mind.”

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