All Bar One owner Mitchells and Butlers (MandB) has become the latest company to warn of price increases following measures announced in the Budget, as it revealed costs will rise by approximately £100 million next year. The group, which also owns brands such as Toby Carvery, highlighted that increased wage expenses are “by far the most significant increase” in its cost base following last month’s Budget announcements.
CEO Phil Urban told PA news agency that MandB is facing around £23 million a year in additional costs due to the rise in national insurance contributions alone, with the increase in the minimum wage also causing its wage bill to surge. In total, its costs will increase by about five per cent, or £100 million, in 2024/25 and Mr Urban said the group’s prices are likely to have to rise as part of efforts to offset these extra expenses.
He mentioned that prices are already expected to increase across the sector next spring, but added ‘we’ll probably have to go harder to cover the latest cost increases’. He stated that the group – which employs about 45,000 people – will review prices on a ‘site-by-site basis’, but emphasised there are no plans to curb recruitment or cut jobs.
“Having good service is critical,” he said. Mr Urban’s comments were made as MandB’s annual results showed it swung to a pre-tax profit of £199 million for the year to September 28, against losses of £13 million the previous year, with like-for-like sales up 5.3 per cent.
Underlying earnings surged by 41.2 per cent to £312 million, adjusted for a 52-week period. The group reported that like-for-like sales growth had slowed to four per cent in the first seven weeks of the new financial year, anticipating a return to more typical sales growth levels as inflation subsides, reports Devon Live.
However, M&B sounded a cautious note: “In the year ahead, the main uncertainties facing the group are considered to be the maintenance of sales growth in the face of pressure on consumer spending power, and the rate of cost inflation.
“The outlook for these is uncertain and will depend on a number of factors, including consumer confidence, global political developments, supply chain disruptions and government policies.”