JD WETHERSPOON has underlined the impact on trading from Euro 2020 as it again signalled its expectation of making a loss in its current financial year.

The company, led by outspoken Brexit supporter Tim Martin, reported that like-for-like sales were down by 20.8 per cent for the period between June 10 to July 4, when compared with its pre-pandemic, 2019 financial year. Like-for-like sales had fallen by 8.1% between May 17 and June 10, before the tournament kicked off on Friday June 11.

Wetherspoon, which has around 70 outlets in Scotland, has a long-standing, general policy of not showing football in its pubs. This contrasts with the broader licensed trade, which for more than two decades has used live matches shown by commercial channels such as Sky as a means of drawing custom. However, all Euro 2020 games will be shown on terrestrial television.

The downturn in Wetherspoon’s sales since the tournament began suggests the company may have lost out by not screening the action.

The pub giant stated yesterday that, with the “limited number of exceptions for individual matches, Wetherspoon pubs have not televised UEFA Euro 2020 football matches.”

Some of its pubs were planning to show England’s semi-final clash with Denmark last night.

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Wetherspoon noted that, as of July 4, 850 of its 860 pubs were open again following the easing of coronavirus restrictions, though most of its outlets at airports remain closed.

Between April 12 and May 16, when only outdoor trading was permitted and around 500 of its pubs were open, like for like bar and food sales were down 49%. The company said trading has been helped by the addition of outside seating, noting that landlords, landowners and local authorities have shown flexibility in accommodating extra space in outdoor areas.

But it returned to a familiar theme as it questioned the level of value-added tax applied to the hospitality industry compared with supermarkets, which are zero-rated with regard to the tax.

VAT is usually applied at 20% in pubs but was cut to 5% last year under measures to support the hospitality sector at the height of the pandemic. It is due to rise to 12.5% in September, which the company warned will result in it having to raise food prices by around 40p per meal.

“The VAT rise will make the entire hospitality industry less competitive vis a vis powerful supermarkets,” Wetherspoon said in its trading statement.

The company added: “Treating the same product – food – the same way for tax purposes makes economic sense.

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“Apparent tax benefits to the Treasury, from higher taxes on food for the hospitality industry, are a chimera since tax distortions cause lower growth. The main impact of tax inequality is on high streets and town and city centres, which heavily depend on a diversity of prosperous hospitality businesses for economic, social and employment success.”

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “JD Wetherspoon’s trading update has been greeted with very little cheer among investors with shares down around 0.5% in early trading. Although across the sector outside terraces are heaving and revellers are making the most of their new-found social freedoms, sales at the chains are still like a weak pint of beer.

“Far from being a cash cow, the Euros haven’t helped boost trade, with like for like sales down 20.8% between June 10 and July 4, whereas just before the tournament they were down by 8.1%. The company may be ruing its decision only to televise a handful of matches as much of the football fan crowd has clearly gone elsewhere. It still expects to make a loss for the year to July 25.”

Mr Martin said: “The company continues to expect to make a loss for the year ending 25 July 2021. In a trading update of 19 January 2021, the company’s principal ‘scenario’ estimated sales in the financial year starting 26 July 2021 to be in line with financial year 2019, which remains our current best estimate, on the basis that restrictions are ended, as the government currently intends.”

Shares closed down nearly 2%, or 24p, at 1,215p.