Mitchells & Butlers, the company behind Toby Carvery, Harvester, and All Bar One, has recently increased prices on its menu due to anticipated additional costs of £130 million in the upcoming year, up from the previous year’s £100 million. This surge in costs is primarily attributed to the rise in employer National Insurance contributions and minimum wage, along with increased food prices. The minimum wage is set to increase by 4.1% in April.
The CEO of Mitchells & Butlers, Phil Urban, highlighted that the projected extra costs are mainly driven by significant price hikes in beef and steak. Despite a 30% increase in steak prices, the company is hopeful that costs will stabilize in the near future. Urban mentioned that they have raised menu and drink prices by an average of 3.2% since October.
To offset the impact of rising costs, the company has made strategic adjustments such as reducing the number of steak and beef dishes on their menus and implementing cost-saving measures like a labor scheduling system and auto-ordering to manage stock levels efficiently and reduce waste. Despite these challenges, pre-tax profits for Mitchells & Butlers increased by 20% to £238 million in the year ending September 27.
While like-for-like sales saw a 4.3% growth over the year, the final quarter experienced a slight decline to 3.2%, primarily due to weaker trading in London and premium brand segments. However, sales growth rebounded to 3.8% in the initial eight weeks of the new financial year.
