With several smoking bans just going into effect in the US and debates over proposed bans going on throughout the country, it’s worth revisiting the question of how they impact businesses. (You didn’t really think I was finished with ban posts for the week, did you?) The US has fared decently well thanks to growth in the hospitality industry obscuring the losses in bars that have suffered; whether that will continue in the down economy remains to be seen. The Financial Times‘ Matthew Engel notes that pubs have been hit much harder in the UK and Ireland:
In Britain, where smoking in enclosed public places became totally illegal in 2007, beer sales are down by 10 per cent; analysts attribute half of that to the smoking law. Pubs are now closing at a record rate of 36 a week.
The publicans I talk to (and they have plenty of time to chat these days) have many complaints but the loss of the smokers is top of their list. Some are on the pavement, but most stay at home. Pool tables stand empty; darts leagues wither.
This may not be so noticeable in the cities. The pubs that are closing are mainly small and often rural, precisely the places that are crucial to their communities and that tourist boards witter on about. Big city drinking barns survive; gastropubs may thrive. The inns of Olde England face extinction, killed by the well-meaning.
My own village local is thought likely to go under this year. It is hard to imagine, under current conditions, that more than a handful of traditional pubs – as opposed to thinly disguised restaurants – will be left in the English countryside 10 years hence…
I hardly ever smoked in pubs myself. Nor does anyone else now. They do not drink in them either. Brilliant.
I worry that the same will happen in Oregon, Iowa, Illinois, and other states with far-reaching bans. The urban bars will likely weather the change. The smaller rural and neighborhood bars I’m not so sure of.
Observers can’t remember a worse year for Portland restaurants. In the first two months of 2008, seven restaurants closed, four as part of the implosion of the overextended N.W. Hayden Enterprises. The year ends with the fall of Lucier — the $4 million South Waterfront showcase — ringing in our ears. In between, more than 20 Portland restaurants shut their doors…
“I’ve heard some people say their business has dropped by as much as 40 percent in the last month or so,” says Bill Perry of the Oregon Restaurant Association. “Things weren’t too bad until October — sales were off just 4 percent or so over the year — but then, two or three weeks before the election, things just froze. I’ve never seen anything like this; if we want to avoid a big rut in January, people are going to have to begin spending again.”
Perry says January’s increase in the minimum wage from $7.95 to $8.40 per hour will be another blow, especially in tough times, when raising menu prices could further empty dining rooms. “They really won’t have much choice,” he says, “but to let people go or cut their hours.” [...]
Effects ripple through the community. Oregon lost 1,900 restaurant jobs in September and October, and suppliers are left with unpaid bills and dwindling orders.