Two mighty brands but what a contrast! It appears that Greggs marches onwards and upwards while Wetherspoons is in structural decline. In fact, things have got so bad as to inspire Wetherspoons boss, Tim Martin to quote from Macbeth to describe how the company is doing so badly.
Martin said:
“To coin a Shakespeare phrase, ‘the multiplying villainies of nature do swarm upon’ the hospitality industry, following the lockdowns and restrictions of the pandemic – and surprisingly perhaps, the aftermath has been just as difficult for many companies.”
But there is a an old adage that applies to both brands “You reap what you sow” and for Brexit loving Martin he is now feeling the effects Brexit has had on his company and on the entire nation. It is not down to the pandemic only, not by any means.
Am I sad? Yes, of course I am sad for all his staff, but as a businessman and friend of Boris Johnson I am saying that the consequences that were forecast to come from Brexit have caught up with him and I, for one, am not losing any sleep over it.
Unfortunately many businesses have also been impacted. Examples are a brewery in Kent once lauded by the government for its exports now gone out of business because of Brexit, and a Scottish Brewery which had a thriving export market also going bust.
Greggs booms again
Greggs announced its recent results for the third quarter to 1 October 2022. The company said sales rose 14.6% compared to the same period last year and opened 106 new stores with just 16 being closed. Two of the new drive through stores are in Amesbury and Durham. The chain now has 2,271 stores and another 150 are expected to be opened this year. Fans of the brand can get up to date news and of course latest menu and specials offers. With its origins in Gosforth, Northerners can feel so proud of this local brand which is now a giant and a much-admired national brand.
Why quote Macbeth?
Times must be really bad when Tim Martin felt the need to quote from Macbeth, saying “the multiplying villainies of nature do swarm upon” the hospitality industry. Martin went on to say it faced “a momentous challenge” to lure drinkers off cheap supermarket beer and back to its pubs after reporting another year of losses.
The price of drinks in a pub can be really expensive and if drinking in London, well don’t expect change out of £20 for three drinks. But what has caused this sharp rise in prices? Brexit over the last year has contributed significantly to import costs with an estimated £1 added to a typical cost of a bottle of wine. More recently the crashing of the pound following the recent Truss mini budget will also add to future import costs and of course the war in Ukraine has forced up energy costs for all of us.
But for Wetherspoons with its estate of 852 pubs, this year’s loss of £30m on top of the £154 million loss for the prior year spells no dividends yet again for shareholders with Tim Martin being the biggest shareholder. As the shares have plummeted this year his personal shareholding has declined in values by a reported £364million and with no dividends to soften the blow. Times must be really hard for the ‘Spoons founder.
Pubs for sale
Agents have been appointed to sell 32 Wetherspoons pubs recently but is this a sign of further sales of pubs? Time will tell. However, it’s clear that all pubs and restaurant groups are having a hard time and the spiral in interest rates caused by the unfunded tax cuts announced by the new Truss government will reduce people’s discretionary spending even further. People will struggle to fund exceptionally high energy costs, food cost inflation and of course fast rising interest rates on mortgages.
Brands which cannot appeal to cost conscious customers may really start to wither and suffer heavy losses. However, brands that can adapt and be flexible may continue to prosper.
It’s clear Greggs will be a winner and continue to be a mighty well loved and respected Brand. Don’t know what we can say about Wetherspoons.
We definitely need local pubs so perhaps readers may wish to frequent their local pubs that are not part of a national chain that share their values and where they feel welcome and valued.
Cheers and enjoy your next pint wherever you live!
