Tim Martin likes to plough his own unique furrow. From his penchant for attending City results presentations in chinos - or even shorts – to his mullet hairstyle and his love of rubbing the establishment up the wrong way, the JD Wetherspoon founder loves nothing better than to fan the flames of controversy.
Among the issues that have particularly got his juices going over the years have been the euro, taxes, corporate governance and, of course, Brexit. On most of these subjects Martin has managed to navigate a course that has burnished his “man of the people” credentials, firmly established during 41 years of serving the cheapest food and drink in town.
Admirable though his determination to swim against the tide has been, Martin appears to have got himself in a fuddle over coronavirus. And not just once, but several times. His first mis-fire came on March 17th when he urged the government to “show Dutch courage” and keep the hospitality industry open for business.
Martin, who founded the business in 1979, said he believed Boris Johnson would be making a “tactical error in resorting to a de facto lockdown”, adding: “The Dutch position of frankly admitting that most people will get the virus, while protecting the elderly and sick, thereby building up group immunity, is the best path for the UK.”
He said that even with reduced sales levels the impact of keeping the hospitality industry open was “colossal”, pointing out that it contributed £120 billion of tax a year, with Wetherspoon alone accounting for £2 million a day.
In making that argument, the Wetherspoon boss was laying himself open to the charge of effectively putting the economic and business health of the country ahead of the health of its population, which didn’t go down too well in some quarters. Three days later, during the group’s half-year results, he backed up his anti-lockdown argument with a quip that more people had contracted coronavirus in the Houses of Parliament than in his pubs.
Now, that may well have been true, but with the number of people dying of coronavirus gathering pace it was a poorly judged comment – and his attempts to bat away suggestions that he should leave it to the medical experts to opine on covid-19 by insisting he was entitled to express an opinion did not go down well. Dismissing the suggestion that he was being irresponsible, he said: “I’m running a company with
43,000 employees so I have to try to weigh up the information. I’m not an expert or an economist, but I’ve got a view and people can accept it or not.”
Not the most outlandish argument, perhaps, but his views very quickly looked out of date when, just a few hours later, the government announced that all pubs and restaurants would have to close to stem the spread of the virus. A week later and he was back in hot water when a video to staff emerged of Martin suggesting that they might like to take a temporary job with Tesco. His accompanying warning that the pub chain’s 43,000 employees may not receive any pay until the end of April when the government’s furlough scheme was due to kick in added fuel to the fire. What’s more, he warned suppliers to expect a pause in payments until its pubs reopened.
All of which came across to me as a desperate attempt by the company to conserve cash in what had become a potential doomsday scenario.
Fair enough, you might say, and in truth there are plenty of other companies that have resorted to similar survival tactics. With its high-volume, high-cost and low-margin business model, some analysts have started to question whether Wetherspoon might even need an equity fundraising or other liquidity injection, with Nigel Parson at Canaccord Genuity suggesting it may need as much as £250m.
So if Martin is simply deploying every weapon at his disposal in a fight for survival – something every pub company in the land is doing – why has he been singled out for opprobrium?
One pub industry rival, who had some sympathy for what Martin was trying to achieve, said it was partly due to his high profile and the “misguided” way he had dealt with both his employees and his suppliers. “He’s going about it in the wrong way. He may not be a spokesman for the industry but he’s a vey high profile person in the industry. Antagonising people in the way he does just doesn’t help. He needs to learn a bit of humility and not always try to be the big ‘I am’ who tries to dictate policy.”
Another pub sector CEO, again somebody who understood Martin’s predicament, said: “He pushes the boundaries but he needs to do it in a less aggressive and abrasive way. Tim provides good copy but I think he’s got it wrong this time. This is not the time to be the big entrepreneurial maverick. Even Mike Ashley had the nous to apologise after claiming he should be allowed to keep his Sports Direct shops open. He needs to engage and work with government instead of trying to challenge them the whole time.”
In fairness to Martin, he has himself since done something of a U-turn on paying furloughed staff, although it remains to be seen whether being painted as a member of the coronavirus hall of shame does any lasting damage to his relationship with employees, suppliers and customers.
When Alex Scrimgeour was faced with the “Armageddon scenario” of a total shutdown of his Côte Brasserie chain, he quickly pressed the button on a project he had only had brief discussions about.
In an example of how the industry is responding to the crisis, within a few days of the Prime Minister’s decision to close down all eat-in restaurants to stop the spread of coronavirus, Scrimgeour had launched Côte at Home, a business delivering restaurant-quality chilled meals to customers, initially in the Home Counties.
The chain, which is majority controlled by BC Partners, the private equity firm, has started delivering meals from the Côte menu such as beef bourguignon and potato purée and poulet grillé with gratin potato that take 30 minutes to heat up in the oven or can be put in the freezer.
The Côte CEO, who is a former chef, said: “We had long felt that chilled prepared meals were an opportunity and had held conversations about getting Côte into supermarkets. We had discussed plans to do it in a year’s time, but events have condensed a year into a week.”
As well as bistro-style French meals prepared at its central kitchen, the online shop sells wine from the Côte wine list at retail prices and meat from the company’s butchery, including “value-added” items such marinated chicken supreme and duck confit.
The scheme, which Scrimgeour is planning to go nationwide with as soon as possible, charges roughly half menu prices. So beef bourguignon, which costs £14.95 in its restaurants, is £13.95 for a serving for two people. There is a minimum spend of £40 with a delivery charge of £4.95, although delivery is free for orders over £80.
The Côte boss said that although the online shop had been launched as a response to coronavirus, he believed it would benefit from the inevitable shift in consumer behavior and the lingering effects of social distancing. “It’ll be a long time before we get back to normal.”
Before the crisis, Côte’s 96 restaurants generated an annual turnover of £170 million and had about 3,500 employees. The group, which was founded in 2007, is retaining the majority of its staff under the government’s furlough scheme, while the central kitchen and butchery has preserved about 50 jobs. The directors have stayed on, but have taken a 50 per cent pay cut.
Speaking to me from his garden, Scrimgeour said: “The irony is I can’t help thinking what fabulous sales we would have enjoyed over the Easter holiday with this fantastic weather.”
Dominic Walsh: on Wetherspoons and Cote
Tim Martin likes to plough his own unique furrow. From his penchant for attending City results presentations in chinos - or even shorts – to his mullet hairstyle and his love of rubbing the establishment up the wrong way, the JD Wetherspoon founder loves nothing better than to fan the flames of controversy. Among the issues that have particularly got his juices going over the years have been the euro, taxes, corporate governance and, of course, Brexit. On most of these subjects Martin has managed to navigate a course that has burnished his “man of the people” credentials, firmly established during 41 years of serving the cheapest food and drink in town.