Wetherspoon hit by high street pubs price war
Saturday 05 March 2005
JD Wetherspoon, the high street pubs chain, yesterday defended its bold move to ban smoking in its pubs ahead of Government legislation on the issue by revealing that its two new non-smoking pubs were significantly outperforming the rest of the group.
However, the news came as Wetherspoon admitted that the price war between high street bars was continuing to hit the group's performance. Profits for the six months to 23 January dropped 20 per cent to £22m after Wetherspoon cut prices but failed to drive enough volume to offset rising costs in the business. Like-for-like sales were flat over the six months, while utility bills soared and the minimum wage increased.
Despite the tough trading conditions, John Hutson, chief executive, defended the decision by Wetherspoon's founder and chairman, Tim Martin, to introduce a blanket smoking ban by 2006, two years before the industry is required to act. "The pubs, in St Albans and Exeter, have opened with above average sales. They also have the highest wine sales in the group. We are very pleased with the results so far," he said.
Wetherspoon has pledged to convert 10 per cent of its estate to smoke-free venues by May 2005, with the rest by May 2006. The Government has put forward proposals to ban smoking in pubs that serve food by 2008. "The number of people who smoke in the UK has halved in the past 30 years. Less than a quarter of Britons smoke. Pubs should be appealing to the widest section of society," he said.
But analysts were unconvinced that Mr Martin's smoking step will be a success given it is already experiencing difficulties. Nigel Popham of Teather & Greenwood, said, "It hasn't got the profits to play with to risk losing business from smokers. It is already under huge competitive pressure and it appears to be making its situation considerably worse."
The company expanded rapidly throughout the 1990s, but heightened competition from rival pub operators and escalating costs forced it into three profit warnings during 2004.
Shares closed yesterday at 264.75p, down from 272p.
- 1 Astrological signs are almost all wrong, as movement of moon and sun throws out zodiac
- 2 Dad eats daughter's weed brownies, thinks he's had a stroke
- 3 The West has it totally wrong on Lee Kuan Yew
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Amanda Knox murder conviction: Italian court overturns verdict for US student and Raffaele Sollecito in the killing of Meredith Kercher
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...