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U.K. pub chains gained ground on Tuesday, as Prime Minister Boris Johnson allowed the hard-hit sector to reopen.
Pubs will be permitted to reopen on July 4. Almost as important, Johnson also relaxed social-distancing rules to one meter from two, which is important for the often-cramped sector.
Gainers included JD Wetherspoon JDW, +4.03%, Marston’s MARS, +1.06% and Mitchells & Butler MAB, +0.44%.
Pub reopening won’t be easy. Mark Brumby, principal at Langton Capital, points out social distance is “virtually unenforceable” at any length. “Distancing depends on the goodwill of customers, operators etc., lavatories can’t function (doorways are too narrow) so there may be a touch of the Dominic Cummings about it, use your initiative,” he said, in reference to the actions of the prime minister’s political adviser who relocated from London during the coronavirus lockdown.
Another issue is the health of pub infrastructure. “Pubs have not been shut for this period of time during the lifetimes of anybody involved in the industry. Cask Marque and others have issued guidance. Illness and diseases such as Legionnaire’s disease are a risk if this is not handled properly.”
Pubs having to take the names of customers also will be a challenge, he added.
The broader FTSE 100 UKX, +1.33% gained 1.4%, in line with the broader optimism in global financial markets on Monday.
