Pub group Marston's to axe 2,000 jobs

Pub group Marston's has announced it is to axe about 2,000 jobs as a result of new Covid-19 restrictions.

Marston's head office in Wolverhampton city centre
Marston's head office in Wolverhampton city centre

The Wolverhampton-based group, which has pubs across the region, said the 2,150 people currently on furlough would be affected.

It comes as the group posted a 30 per cent drop in annual sales amid the pandemic.

Sales for the year ending October 3 fell to £821 million. Pub sales were £515 million, while Marston's Beer Company generated sales of £306 million. These figures are down 34 per cent and 22 per cent year-on-year respectively.

Pubs across the UK face a range of restrictions, from curfews and reduced capacity to enforced table service, as part of the public health measures to reduce the spread of Covid-19.

Marston's, which had placed 13,000 of its 14,000 workers on furlough earlier in the year, said the new rules have undermined consumer confidence and caused uncertainty.

CEO Ralph Findlay said: “This year has been testing on many fronts, predominantly from having to navigate the consequences of Covid-19.

“On reopening, we set ourselves three objectives: for pubs to be safe for our guests and our people, to retain pub ambience, and for our pubs to be financially viable. I believe we have met those objectives.

Marston's CEO Ralph Findlay

"Trading has been difficult, but to operate at 90 per cent of last year on a like-for-like basis is better than our forecast, ahead of the market and a highly creditable result.

"In part, this is because most of our pubs are in suburban or community settings, and we have relatively few pubs in city centres which have been worst hit by changes in working habits.

"However, the additional restrictions which have been applied across the UK most recently present significant challenges to us and will make business more difficult for a period of time.

"I very much regret that the consequence of this is that the jobs of around 2,150 of our colleagues will be impacted, but it is an inevitable consequence of the limitations placed upon our business. We will be looking at our cost base further in the coming weeks."

Union calls for government support

The announcement has led Unite the union to renew its call for the Government to give concrete support for the struggling hospitality sector.

Unite, which has about 580 members at Marston’s, mainly working in the breweries at Wolverhampton and Burton upon Trent, is seeking clarification of the impact on its members.

Unite regional officer Rick Coyle said: “This grim news from Marston’s is another nail in the coffin of the struggling hospitality industry and today Unite renews its call for the government to produce a concrete and coherent package of measures to support the sector which is now on life support.

“Thousands of jobs across the UK are depending on such a package being delivered urgently by chancellor Rishi Sunak, otherwise the UK’s hospitality sector will become a waste land.

“Unite’s members at Marston’s are mainly based at the breweries in Wolverhampton and Burton upon Trent and we are seeking urgent clarification from management on what the announcement means for our members producing such iconic brands as Pedigree.

“Unite will be giving maximum support to our members at Marston’s at what is a desperately worrying time for them and their families with Christmas on the horizon.”

Merger

Last week it emerged Marton's joint venture with Carlsberg had been cleared by the Competition and Markets Authority, with the deal now set to be completed by the end of the month.

Mr Findlay added: “We have managed our cash flow very carefully and it is a credit to our teams that net debt is £70 million below where it was at end of the financial year 2019 and £50 million below the interim 2020 level despite the 15 weeks of pubs closure.

“Strategically, the transformational deal with Carlsberg has highlighted the inherent appeal and value of Marston’s Beer Company and will contribute to a further reduction in net debt when it completes at the end of October.

"We look forward to seeing the Carlsberg Marston’s Beer Company grow, realising the significant benefits set out at the time the joint venture was announced.

“There is much uncertainty ahead, the majority of which is outside of our control, however we will continue to focus on the safety of our teams and guests.

"Looking beyond the immediate challenges, we look forward to our future as a focused pub operator, returning to growth when trading conditions allow and realising the opportunities which are open to us over the medium to longer term.”

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