JD Wetherspoon hit by smoke ban

JD Wetherspoon says bar sales are falling as the smoke ban starts to bite.

JDW reported a 1% decrease in like-for-like sales for the 13 weeks to 28 October.

The company said that during the period it achieved strong like-for-like food sales growth and a 1.4% increase in total sales.

However, this was offset by a decline in like-for-like bar sales and a 0.6% fall in operating margins due to an expected rise in lower gross margin food sales.

JDW said that operating costs for the year so far were in line with expectations, although interest charges were slightly higher.

It said that encouraging growth in food sales had continued after a strong increase in like-for-like sales in the first month after the smoking ban.

However, in line with market expectations, its bar sales have come under some pressure due to the ban.

The company said that it remains cautious in its outlook for the financial year due to the uncertainty over the impact of the ban but that it was confident that the implementation of the legislation would be for the long-term benefit of the pub trade.

Chief executive John Hutson told Reuters: "Food has continued to be double digit positive similar to what we said in August but bar sales which had strayed into single digit negative territory have slid back a bit further to the higher end of single digits."​

The news comes after weekend press reports that analysts were predicting a drop in expected profits at Punch Taverns when it announces its results on Thursday.

Regent Inns also warned yesterday that profits at its entertainment bars, such as Walkabout, may be hit by the smoking ban and if England's football team fail to qualify for Euro 2008.