Total pub sector sales of food and drink reached £32.3 billion in 2006. Of this:

• food accounted for 14% (or £4.5 billion)
• drink associated with food, ie alcohol and soft drinks that is consumed with food, accounted for a further 7% (£2.3 billion).

The first point to look at is the outcome if the smoking is not to be introduced – the "stable market". Under this forecast, sales in 2007 will be £32.2 billion.

However, the impact of the no smoking ban, having taken account of the points made above is that overall pubs sales will fall very slightly to £32.1 billion in 2007.

The conclusion from all this is that in the UK as a whole, assuming that the smoking ban is introduced throughout the country in 2007, pub sector sales will actually fall by -1.6% between 2006 and 2008:

• however, sales of food, plus the drink that is consumed with it, will grow by 15.3% over the same two years
• on the other hand, alcohol and soft drinks not consumed with food will fall by -6.1% in the same period.

Why should food sales increase? The obvious answer is that a smoke-free pub is a more congenial place to eat than a smoke filled one.

While there is some truth in this, it is unlikely, to account for the sometimes dramatic increases noted by operators such as Mitchells & Butlers and JD Wetherspoon in Scotland.

We believe that the efforts – in terms of and investment to upgrade locations, coupled with media comment at the time of the introduction of the ban will also exert some influence.

Source: Horizons

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