U.S. News

Smoking Ban a Plus and Problem for English Firms


With a ban on smoking in all enclosed public spaces coming into force in England on Sunday, analysts predict nightclubs, casinos and bingo firms will be hardest hit while restaurants will be the biggest beneficiaries.

England will fall into line with the rest of Britain next week when the habit will be outlawed in offices, restaurants, bars and inside all public buildings.

While surveys have shown the majority of England's population agree with the ban, operators of pubs, casinos, nightclubs and bingo and snooker halls have joined the ranks of hardened smokers fuming at the decision.

While such companies are bracing themselves for a drop in profits if smokers stay at home more often, restaurants, coffee shops and pubs with good menus are hoping to benefit as new customers sit down for a meal in smoke-free atmospheres.

"The ban presents a real opportunity for those restaurants and pubs that boost their food offering to attract a new clientele that have in the past been put off by smoky venues," said Glyn Bunting, a hospitality & leisure partner at consultancy Deloitte.

"Pubs that have an outside space where people can go and smoke will obviously cope better than those that don't," Bunting added.

Analysts at PriceWaterhouseCooper say on average pubs which serve little food will see revenues drop by up to 10%, while bingo and snooker clubs could see profits fall 15% and casinos could see a 10% drop.

The chief executives of pub firms JD Wetherspoon and Youngs have both said they expect sales to rise after a short-lived dip as their pubs begin to serve more food and attract new customers.

Smoke-Free Benefits

"Where we have already gone non-smoking it's been to our benefit," Youngs boss Stephen Goodyear said in May. He added that where the firm had also redecorated a pub and spruced up the beer garden or patio it had seen 70% to 80% revenue rise.

Ireland became the first country in the world to ban smoking in March 2004, heading a now rapidly growing list of countries including France, Italy, Spain, Dubai, Hong Kong, Australia, Canada and parts of the United States that have all outlawed the habit to some degree.

Scotland brought in a ban in March 2006 and analysts see this as the best guide to how English smokers will react when the ban comes into force on Sunday.

Bingo and casino firm Rank said on Thursday that 13% less people were visiting its bingo halls in Scotland than before the ban, with revenues there down 10% as a result.

Smoking bans hit bingo halls in a number of ways -- many bingo players are older women and some stop going because they don't want to have to stand outside to indulge their habit. And those who still go step out to smoke in breaks between games instead of playing highly profitable gaming machines.

Such machines earn bingo clubs up to 75% of their profit.

To combat the decline, companies such as Rank and Gala are hoping to draw back players with bonanza prizes, better food and new gadgets so they can still play games, even while they are puffing away outside.