Non-smoking pubs less profitable
Discussion
Reuters said:
Wetherspoon shelves smoking ban
LONDON (Reuters) - Pub chain JD Wetherspoon posted a 21 percent rise in first-half profit but was cautious about prospects for the second half of the year due to the impact of impending smoking bans and the World Cup.
The company, which runs around 650 managed pubs, said it had also shelved plans to ban smoking in all its pubs in the next three months after profits fell sharply in already smoke-free pubs.
Profit rose 27.4 million pounds for the six months to January 22 on turnover up 1 percent to 406.3 million pounds.
Belt-tightening measures such as cheaper glasses and wage-control were the main reasons for the improvement.
"We've been quite active on costs generally across the board," Finance Director Jim Clarke told Reuters.
Wetherspoon said overall like-for-like sales increased 1.9 percent in February, but it was cautious going into the second half, which will include the World Cup in June and July.
Most Wetherspoon pubs do not show sports or play music.
Wetherspoon shares, which have risen steadily over the last year, were down 2.8 percent at 347-1/4 pence by 10:37 a.m., valuing the company at around 574.5 million pounds.
SCOTTISH DRAG
Like-for-like sales at its pubs where smoking is already banned fell 7.6 percent, and margins fell around 20 percent, as increased food sales failed to compensate for a decline in bar and slot-machine sales.
Wetherspoon had planned to convert all its pubs to non-smoking by May but said it would now wait until the last possible moment when a blanket ban is introduced across England in the middle of next year.
Definately a time and place for Non-smoking pubs. But I would suggest that Weatherspoons isnt the one! Pretty much they base themselves on the lowest cost beer / spirits in a town and do a "Tesco's" on everyone. Hardly the decerning audience who would understand and apprechiate a non-smoking pub really?!?!?!
Still, from what I can see in some non-smoking pubs, there is money to be made. Recently came back from Dublin and its rather pleasant I must admit.... mind you the streets are full of ciggie ends..!
Still, from what I can see in some non-smoking pubs, there is money to be made. Recently came back from Dublin and its rather pleasant I must admit.... mind you the streets are full of ciggie ends..!
Heard them going on about this on Radio 4 this morning ( 
)
The Wetherspoons bod they were interviewing said that the legislation for non-smoking pubs was going to be in 18 months earlier than they had predicted, hence their reluctance to push the transition system forward (lack of profits).
He also said that research in Ireland, California and New York had suggested takings would take a hit for the first two years or so, before settling out at a similar level to current.
) The Wetherspoons bod they were interviewing said that the legislation for non-smoking pubs was going to be in 18 months earlier than they had predicted, hence their reluctance to push the transition system forward (lack of profits).
He also said that research in Ireland, California and New York had suggested takings would take a hit for the first two years or so, before settling out at a similar level to current.
off_again said:
Definately a time and place for Non-smoking pubs. But I would suggest that Weatherspoons isnt the one! Pretty much they base themselves on the lowest cost beer / spirits in a town and do a "Tesco's" on everyone. Hardly the decerning audience who would understand and apprechiate a non-smoking pub really?!?!?!
Agreed
I seem to remember there was a time when they had no tv's in their pubs, until they realised they were losing out when the big football & rugby matches were on. For purely economic reasons they installed tv's in some pubs. When the smoking ban arrives maybe they'll also allow music in the pubs to avoid another drop in sales, which means that a wetherspoon will be just like any other pub - which goes against their USP: no tv & no music!
The press comment doesn't show the complete picture. Evidence from other countries shows the sales drop is transitional ( temporary ).
The issue for any listed business is managing shareholder / city expectations in the financial year when sales initially dip then re-build as the customer / business mix changes.
The issue for any listed business is managing shareholder / city expectations in the financial year when sales initially dip then re-build as the customer / business mix changes.
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