Several of the UK's most popular pub and restaurant chains are implementing price increases, delivering an unwelcome change for household budgets. Toby Carvery, All Bar One, and Harvester have confirmed hikes across their menus and drinks, driven by a significant surge in operating costs.
The £130 Million Cost Pressure
The parent company, Mitchells and Butlers (M&B), revealed it is facing an additional £130 million in costs for the year leading up to next September. This substantial bill is attributed to a combination of a soaring national wage bill and sharply rising beef prices. In response, the hospitality group's chief executive, Phil Urban, stated that average prices across its estate were raised by 3.2 per cent in October.
Urban explained the difficult balancing act, noting that some competitors have removed steak from their menus entirely. "Where steak is not the core product, we have reduced the number of steak and beef dishes or re-engineered the menu," he said. However, he emphasised a commitment to quality, stating, "What I won’t do is change the quality of the meat or the portion size… and nor can we pass on all that (cost increase) on to the customer."
A 'Perfect Storm' for Steak Lovers
The price of steak has been particularly affected by what Urban described as a "perfect storm" impacting UK beef supply. This has put specific pressure on the group's Miller & Carter steakhouse brand, which Urban admitted would "go backwards this year" as a result. He indicated that M&B would aim to offset this underperformance through stronger growth in its other brands.
Beyond ingredient costs, the company's financial burden also includes a preliminary assessment of the impact of the Chancellor's recent autumn Budget. Urban expressed disappointment over property tax changes, calling them "super disappointing" for the hospitality sector.
Consumer Confidence and the Road Ahead
The chain's boss also commented on recent consumer behaviour, noting that sales were subdued in the run-up to the Budget announcement, with many customers feeling "unnerved" by prior speculation. He suggested that with the Budget now passed, people are "relieved that it’s come and gone" and may be more willing to spend on socialising before worrying about finances in the new year.
Despite the significant cost headwinds, Urban pointed out that larger groups like M&B are experiencing only a "modest increase" in the overall cost base compared to smaller operators. The price adjustments mark a challenging period for the hospitality industry, with major household-name chains forced to pass on some of their rising costs to consumers.
