Non-smoking pubs boost Wetherspoon sales
The JD Wetherspoon pubs chain group today said the first of its non-smoking outlets had achieved sales "substantially higher" than the company average.
The group, which wants 10 per cent of its estate to be smoke-free by May, described the response of drinkers at new sites at St Albans and Exeter as encouraging.
The update came as JD Wetherspoon said half-year pre-tax profits fell 20 per cent to £22.3 million, following a "testing period" for the company.
Sales in the six months to January 23 increased by 4 per cent to £403.3 million - up by 0.3 per cent on a like-for-like basis - but earnings have been hit by the impact of rising overheads, particularly from higher energy and wage bills.
Wetherspoon, which has 652 pubs, described the performance as "slower than anticipated" and added that like-for-like sales in February declined by 1.9 per cent.
The chain said the next test for its no-smoking policy will be on Wednesday when it introduces the ban at existing pubs in Reading, Bath, Rickmansworth, Liverpool and Gateshead.
It wants to convert the whole of its estate by May 2006.
Wetherspoon surprised the industry in January by announcing it would pre-empt moves towards a ban on smoking in workplaces and bars which served food.
The company said there was an "increasing desire" from customers and staff to avoid passive smoking, adding that research in California indicated sales had increased in the years after a smoking ban had been introduced.
Finance director Jim Clarke said today: "We are quite encouraged by the early response but the key test will be when we convert the next 60 pubs."
Amid changes to licensing laws and the introduction of a smoking ban, the group said it would maintain its cautious approach to expansion.
The sluggish sales growth will also result in significant savings in the running of pubs and at its head office over the next few months.
Chairman Tim Martin said: "In spite of the recent slow trading conditions, as a result of our strong cash generation, high levels of sales per pub and a dedicated team, I remain confident of future prospects."
He recently blamed supermarkets for much of the increased sales competition with off-trade prices at the same levels as in 1997.
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