Smoking ban affects JD Wetherspoon

JD Wetherspoon, the pub chain, has announced that the smoking ban has started to have an impact on sales and cautioned investors that increasing staff and interest costs would eat into profit, knocking its shares 6%.

Wetherspoon’s Chief Executive, John Hutson, commented that he was relaxed about the forecasts for 2007-2008 but said that costs would not decline as anticipated earlier.

Wetherspoon posted a pretax profit of £62 million for the year to end of July, slightly below experts’ predictions of £63 million and up 7% on a like-for-like basis on 2005-2006. Wetherspoon said like-for-like sales growth of 5.6% in its 2006-2007 year slowed to 1.1% last month.

The Chief Executive added that the flooding and wet weather in June and July had boosted their trading, forcing customers off the street and into its beer gardens. In addition, food sales have increased rapidly since the smoking ban and helped compensate for a slowdown in beer sales. The site of the Wetherspoon’s pubs help with pubs in the town centre pubs selling around 250,000 breakfasts a week.

Finally, Wetherspoon’s said bar sales grew by 1.3% in July and food by 24.8%.

JD Wetherspoon has 650 pubs and is renowned for being quiet bars with inexpensive food. The pubs have a standard menu throughout the country and serve a variety of low priced cask ales. Pubs in the chain rarely play background music and generally do not have televisions or sports and news.

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