If the impact of the smoking ban continues to be felt over the following years then, by 2010 according to our forecasts, food and associated drink sales will total £8.4 billion and will be £1.6 billion higher than in 2006. The smoking ban will contribute £381 million to this total with the balance coming from other market trends.

Food sales will increase by £1.1 billion over the five-year period to £5.6 billion in 2010. Drink sales associated with food will grow by £554 million, of which £130 million, or 28%, will be a positive result of the smoking ban.

Over the same 5-year period, we expect total pub sales to grow to £32.4 billion – an increase of £118 million. The smoking ban will account for all of this increase and more, as a result of the increase sales of food and associated drink sales above the level they would otherwise have reached.

Pub restaurants – generally freehouses or managed pubs whose food sales exceed their wet sales - will do best over the next five years. We forecast that their sales will increase by £874 million or +61%; however, the smoking ban will have little or no impact on their underlying sales increase which we believe will have come about anyway.

Freehouses, we forecast, will see no change in their food and associated drink sales. Nevertheless, we forecast a growing number of food-led freehouses some of which will become pub restaurants (and therefore will move out of the category of “freehouse” according to the definitions used by Horizons).

Source: Horizons

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