JD Wetherspoon halts non-smoking pubs' roll-out

From The Publican

03-Mar-2006

Related topics: Company & City News

JD Wetherspoon is calling a halt to its roll-out of no-smoking pubs until the government brings in the full smoking ban next year.


Wetherspoon chairman Tim Martin said 49 of the group's pubs were now non-smoking, with 12 of these being new openings in 2005.


However, he noted that like-for-like sales in these non-smoking outlets fell 7.6 per cent in the quarter ended January 22 2006, with a four per cent dip in operating margin.


In the light of this, together with the government's plan to introduce a full smoking ban by the summer of 2007, the group would not be converting any more existing Wetherspoon pubs to no-smoking venues until the full ban comes into effect.


New openings would continue to be no smoking.


"It is clear from our experience and from the evidence of other areas, such as Ireland, California and New York, that the initial effect of a smoking ban can result in sales and margin declines," said Mr Martin.


"However, we believe that sales and margins can recover over time, once customers adjust to the non-smoking environment," he added.


Reporting trading figures for the six months to January 22 2006, Wetherspoon said like-for-like sales decreased 0.3 per cent.


Pre-tax and interest operating margin across its estate grew 9.8 per cent due to lower head office costs and improved pub profits, the group said.


The first half had seen five new pub openings, against a full year target of 13. The group sold six pubs in the period, resulting in an estate of 654 pubs.


The group planned to boost investment in its estate from the current two per cent of sales to four per cent in the coming year.


Sales at new pubs "were in line with expectations", Mr Martin said.


Overall trading in February was up 1.9 per cent, against a similar decline in the same month last year.

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