Mitchells & Butlers, the company behind Toby Carvery, Harvester, and All Bar One, has implemented price increases on its menu due to anticipated additional costs of £130 million in the upcoming year, up from £100 million in the previous financial period.

These cost escalations are primarily linked to the recent surge in employer National Insurance contributions and minimum wage, as well as the rise in food prices. The government’s announcement of a 4.1% increase in the minimum wage from April further compounded these challenges.

Phil Urban, the CEO of Mitchells & Butlers, highlighted that the expected rise in costs, especially in beef and steak prices, would amount to an extra £30 million. Despite a 30% hike in steak prices, the company is optimistic about potential cost reductions in the coming year.

To mitigate the impact on customers, the company has implemented a moderate average price increase of 3.2% on its menus and beverages since the beginning of October. Urban emphasized the importance of maintaining product quality and portion sizes while acknowledging the limitations in passing on the full cost burden to consumers.

Despite facing these financial pressures, Mitchells & Butlers reported a 20% increase in pre-tax profits to £238 million for the year ending on September 27. The company has proactively implemented cost-saving measures, including optimizing labor scheduling, auto-ordering to manage stock levels efficiently, and energy-saving initiatives.

While achieving a 4.3% growth in like-for-like sales over the year, the company experienced a slight dip to 3.2% in the final quarter, attributed to weaker performance in London and premium brand segments. Initial sales in the new financial year saw a growth rate of 3.8%.

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