Paul Breen
Director
Colliers CRE
With the potential for a cold winter just around the corner, the real effects of the smoking ban in England and Wales
are likely to become far clearer in the coming months.
The pub sector can hardly complain that the legislation was
introduced without warning and it has had plenty of time
to try to come up with solutions that should make the ban
a little easier to cope with.
Operators have generally all tried to make sure that they can provide external areas and while these are clearly an advantage, how appealing they will be to customers on a
bitterly cold or wet evening remains to be seen. Certain
property owners have been sympathetic to operators and haven't tried to cash in on the ban, realising that the extra outdoor trading space is required as a defensive measure that may only help to restore trade to pre-ban levels.
Equally the additional cost and difficulty to the operator of supervising these external areas also needs to be considered, especially for the more popular venues where there may be a queue of new customers wanting to gain entry, just as a large number of those already admitted are trying to get outside for a cigarette. Add a door charge into the equation for a late-night venue and, as an operator, you have a logistical nightmare!
Increasing food sales have been seen by many as the
perfect solution to the ban and food-led businesses look most likely to come out on top, but there needs to be a realisation that not every pub has the right physical characteristics to provide a significant amount of food.
Those that have been able to take advantage in this way will also be quick to point out that the margin on food sales is generally far less desirable than wet sales and wage costs can spiral once full-time kitchen staff are employed.
I would urge any property owner who leases out a pub, which has an external area and whose operator has new
leanings towards food, to be cautious about the outlet's
prospects for rental growth. There will be operators who go on to do very well out of the ban, but probably more will have to work a lot harder just to maintain the level of trade that they were achieving before the ban was introduced.