One of Britain’s largest pub and restaurant chains has warned that it faces £100m of “cost headwinds” in this financial year after Rachel Reeves raised taxes and the minimum wage in the Budget.
Mitchells & Butlers - whose chains include Browns, Miller & Carter, Harvester and All Bar One - said it was expecting a jump of more than 5% on its current cost base.
It said “by far the most significant increase” would come from labour costs, ahead of the rises in the National Living Wage and employer National Insurance contributions (Nics), both coming into effect from April.
The Chancellor announced in the Budget that she would lower the threshold on which Nics applies from £9,100 to £5,000, and raise the rate from 13.8% to 15%.
Meanwhile, the National Living Wage will jump by an inflation-busting 6.7% to £12.21.
Mitchells & Butlers chief executive Phil Urban said: “We face increased inflationary cost headwinds in the year ahead.
“However, we shall remain focused on our established Ignite programme of initiatives and our successful capital investment programme, to drive further cost efficiencies and increased sales.”
The company revealed pre-tax profits for the year to September nearly doubled to £211m as revenues rose 4.2% to £2.6bn.
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