Mitchells & Butlers, the company behind Toby Carvery, Harvester, and All Bar One, has recently raised prices on its menu due to anticipated cost pressures. The company is preparing to cover an additional £130 million in costs for the upcoming year, a significant increase from the previous financial year’s £100 million.
The higher costs are attributed to the recent surge in employer National Insurance and minimum wage rates, along with escalating food prices. The government recently announced a 4.1% increase in the minimum wage, further contributing to these financial challenges.
According to Phil Urban, the CEO of Mitchells & Butlers, the projected additional costs primarily stem from a notable spike in beef and steak prices. Despite a 30% surge in steak prices, the company remains hopeful that costs will stabilize in the near future.
To mitigate the impact on customers, Mitchells & Butlers has implemented a moderate 3.2% average price increase across its food and beverage offerings since October. Urban emphasized the importance of maintaining quality and portion sizes while also acknowledging the need to balance cost increases with customer affordability.
Despite facing these financial hurdles, Mitchells & Butlers reported a 20% increase in pre-tax profits to £238 million for the year ending on September 27. The company has implemented various cost-saving measures, such as optimizing labor scheduling, auto-ordering to manage stock levels efficiently, and energy-saving initiatives.
While the company experienced a 4.3% growth in like-for-like sales over the year, the final quarter saw a slight decline to 3.2% 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.