BrewDog worries about end to government furlough scheme
United Kingdom | The government has said it would close its covid-19 support programme for businesses and employees at the end of October 2020. It would be among the first European countries to do so.
The gamble is that the economy will soon recover from its coronavirus-induced torpor and employees can come back to work.
Almost ten million workers – that is nearly one out of four – have had their wages paid by the government. The risk is that pulling the plug too early on the job support programme will drive up unemployment. Economists at JPMorgan Chase, a bank, estimate that ending the jobs programme would result in the loss of an additional 1.8 million jobs. This could push the unemployment rate to 9 percent from just 3.9 percent in June. It is for this reason that Morgan Stanley, another bank, believes that the furlough scheme will need to be extended.
Ever outspoken, James Watt, one of the founders of Scottish craft brewer BrewDog, said that he is very nervous about what will happen when the job retention scheme winds down.
Mr Watt told The Wall Street Journal on 5 September that turnover at BrewDog’s 51 bars in the UK is about 60 percent of pre-covid-19 levels. In central London, where BrewDog’s bars mainly cater to office staff relaxing after work, sales are 20 percent what they were before the pandemic.
At the height of the pandemic, in April, the company had 890 of its 1,200 UK employees furloughed through the programme. All except 95, mostly bar staff, have since returned to work, Mr Watt said, with around 100 having accepted a redundancy package.
The pandemic notwithstanding, BrewDog announced in early September that it will soon open a 4,000 square-foot (380 square metre) bar in Plymouth’s leisure complex The Barcode.
