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Wednesday, 29 November 2006, 10:49 GMT

Pub firm rides out smoke impact

Two women smoke outside a pub in Glasgow Pub firm Mitchells & Butlers (M&B) says early signs point to the impending smoking ban in England and Wales having only a limited impact on its business.

The firm has changed 200 pubs into non-smoking outlets ahead of the ban on smoking in enclosed space next year.

Sales growth at these outlets was only 1% lower over the past year than pubs where smoking is still permitted.

Like-for-like sales at the firm's Scottish pubs - where smoking is already outlawed - have risen 1%.

Winter wait

Despite dire early warnings about the impact of the smoking ban on the pub trade, many pub firms now seem upbeat about the likely results.

"A full winter's trading is required before taking a definitive view on the ban's effect"
Mitchells & Butlers statement

M&B, which operates 2,000 UK pubs, said the results so far in Scotland indicated that larger pubs able to serve high-quality food would benefit.

But smaller outfits with a bias towards beer sales could suffer.

Over the past seven weeks, food sales at the firm's 80 Scottish pubs have risen 7%, while drink sales have fallen 2%.

"Sales growth has slowed as the autumn has drawn in and we continue to believe that a full winter's trading is required before taking a definitive view on the ban's effect," the firm said in a statement.

Overall, M&B reported a 4.1% rise in like-for-like sales over the past year as the firm benefited from a hot summer.

Pre-tax profits in the year to the end of September rose 10% to £208m, while total sales increased 5.5% to £1.7bn.



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Related to this story:
S&N warns of smoking ban effects (07 Nov 06 |  Business )
Smoke-free pubs boost Wetherspoon (02 Nov 06 |  Business )
M&B bounces back after World Cup (26 Sep 06 |  Business )

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