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07 March 2006
JD Wetherspoon Ends No Smoking
Trial
JD
Wetherspoon has
called time on a bold experiment to extend its smoking ban
beyond 49 of its pubs after the company faced plunging
alcohol and slot machine revenues and a backlash from
increasingly disgruntled regular customers.
Profits from 37 pubs that
were converted to non-smoking dropped by 20% for the three
months to January 22 (new pubs are automatically designated
non-smoking). Revenues dropped 7.6% with alcohol sales
believed to have declined by 17% and fruit machine earnings
down by about a quarter. Lower margin food sales grew by
about 10% and now represent about 39% of the sales mix at
the non-smoking pubs.
John Hutson, chief
executive, confirmed the experiment was to be ended, with no
more smoking bans to be introduced until the industry is
compelled to do so by legislation. A smoking ban in Scotland
later this month will mean 36 Wetherspoon pubs north of the
border will join the existing 49 sites operating a
non-smoking policy. With a small number of new openings,
also non-smoking, the group will have 100 cigarette-free
pubs by the summer.
However, Mr Hutson
confirmed plans to ban smoking in all 630 Wetherspoon pubs
by May had been scrapped. "We have decided to await the
complete ban imposed by the government in 2007." He said
there had been signs of a backlash against Wetherspoon's
smoking ban experiment from some customers who he said were
asking: "Why are you doing this? It is going to happen
anyway. Why are you doing it now?"
Mr Hutson insisted the
group had learned a lot from the experiment. "On the big
question of does a non-smoking Wetherspoon pub work, the
answer is yes."
He disputed suggestions
from some analysts that Wetherspoon was more reliant on
smoking customers than some rival pub chains. "We believe
the incidence of smoking in our pubs cannot be far off the
national average."About a quarter of the adult population in
the UK are smokers.
Jim Clarke, the finance
director, cautioned against reading market trends into the
disappointing performance shown by Wetherspoon's 37 smoking
bans. "There is no doubt we have lost smokers to pubs next
door. That can't happen, of course, under a universal
ban."
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