Food sales haven't compensated for the smoking ban

26 June 2008 by
Food sales haven't compensated for the smoking ban

Pub food sales are coming under increasing pressure, almost a year after the smoking ban became UK-wide.

Before the ban, it had been expected that increasing food sales would be the saviour of an industry preparing for lower drinks sales as high-spending smoking customers deserted pubs.

But according to new research by analysts FMCG, pub food sales are actually falling as people look to eat out in pubs less often. As a result some operators are turning their backs on food to improve profit margins.

David Humphries, director at FMCG, which surveyed 1,000 pub-goers in mid-June about their eating out habits, said: "The outlook is just not brilliant. A net 9% are eating out less and the 25 to 34 age group has dropped quite significantly when it comes to dining in pubs."

The industry itself has acknowledged that, 12 months on, food was not necessarily the answer to the predicted short-term fall in trade the smoking ban has caused.

David Bruce, former chief executive at the Capital Pub Company, said: "We have stuck doggedly to our original business plan in the past 12 months. The sales mix is 20% food and 80% liquor. When it comes to food the wage bill is 10% to 15% more for every pound you take.

"Pubs never said ‘let's combat the smoking ban by reducing our gross profit by selling food' but, for some, that was the only way of combating the losses."

James Shorthouse, head of valuations at property agency Christie & Co, said food was not the answer for every publican but operations that had prepared for the ban had "performed better and preserved their value" compared with those that had failed to adapt to the new laws.

"Licensees must play to their strengths and meet the demands of their customers, which in some cases will not be introducing food, but instead creating a quality drink offer that differentiates the pub from its rivals," he said.

Shorthouse added that the Government's rise in alcohol duty would continue to put pressure on wet-led sales.

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By Christopher Walton

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