In another blow for the hard-pressed leisure sector, Boris Johnson has introduced a new three-tier restrictions framework to combat the spread of coronavirus, notably across the north of England.

Noting that wet-led (drinks) establishments are expected to be harder hit than food-led venues, Liberum Capital has identified JD Wetherspoon (JDW) and Marston’s (MARS) as having a larger exposure than their peers to the North of England and Scotland, the areas where infection rates are highest and stricter local restrictions look most likely.

Liverpool is the first city to be placed in the ‘Very High’ category and the bulk of its hospitality venues will be forced to close for at least a month, but further areas could feasibly be placed into this category in the coming days.

The new tiered restrictions imposed on certain areas will be in place for a month before being reviewed and follow restrictions introduced in Scotland that will see all pubs and restaurants in the ‘central belt’ close until 25 October.

Ten Entertainment (TEG:AIM) and Hollywood Bowl (BOWL) have a reasonable presence in Northern regions which potentially exposes the bowling centre duo to new restrictions.

Focused on London and the Home Counties, Young’s (YNGA:AIM) and Fuller, Smith & Turner (FSTA) are not directly impacted by the change in the latest restrictions, though their relative exposure to the Square Mile versus peers remains a drag on trading recovery, according to Liberum.

City Pub Group (CPC:AIM) could be less impacted as its estate is built up around cathedral cities and market towns in Southern England and East Anglia.

Meanwhile, Wagamama-owner Restaurant Group (RTN) and Loungers (LGRS:AIM) look to be least affected according to Liberum.

In the ‘Very High’ category, only wet-led pubs and not food-led pubs or restaurants will be forced to shut their doors, meaning Restaurant Group and Loungers would be exempt from the full closure restriction. They would only be allowed to serve alcohol with a meal.

The travel sector is also feeling the pinch as tighter lockdown restrictions are negatively affecting consumer sentiment.

Investment bank Jefferies thinks the sudden change in UK Government policy could have ‘severe implications for customer booking confidence’. It notes that year-on-year web searches for tour operators have significantly declined from the summer rebound currently down by roughly 65% year-on-year with searches for TUI (TUI) declining the most.

Searches for ‘Package Holiday’, ‘Spain Holiday’ and ‘Tenerife holidays’ have all slumped from July peaks with ‘the recovery reversing due to the UK second wave and volatile policy’ according to Jefferies.

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