Pub and restaurant customers may pay the price for living wage


The owner of All Bar One and Harvester signalled it may have to hike prices as it faces soaring staff costs from the national living wage.

Mitchells & Butlers, which employs more than 44,000 workers across nationwide chains including Toby Carvery and O'Neill's, said it would look at ways to increase customer spend, including "tactical price opportunities" across some of its pubs and restaurants.

The group cautioned the new minimum wage would "dramatically" ramp up costs across the industry, but said it would also see customers benefit from higher wages.

Its warning came as M&B revealed ongoing sales woes amid fierce competition in the restaurant sector and following a washout end to the summer, which left comparable sales 0.7% lower in the final weeks of its financial year.

The group said sales falls had worsened since its year-end, down 1.6% in the first eight weeks.

M&B saw pre-tax profits edge higher to £126 million in the 12 months to September 26 from £123 million the previous year, but had warned over profits in September after the poor end to its financial year.

New boss Phil Urban, who replaced Alistair Darby two months ago after the profits alert, cautioned the market remains "highly competitive", but outlined plans to respond to challenges with "energy and urgency".