Yahoo Finance Pub boss warns price of a pint set to rise by 30p as business costs soar
Pints are set to get more expensive, a leading pub boss warned today, as companies struggle with surging costs. â
Clive Watson, executive chairman of the City Pub Group, said the price of a pint of beer could rise by as much as 30p to cover an increase in minimum wage, rising input costs and a return to 20% VAT.
“We cannot absorb all these increased costs - whether it is the energy costs, whether it is food inflation, whether it is labour costs,” Watson told BBC Radio 4’s Today program. “The only way forward for us is to put the price of food and beer up in our pubs.
“No-one wants to do that, but I reckon the price of beer would probably have to go up 25p to 30p a pint to take account of all these increased costs.”
âThe comments came as Alison Brittain, boss of FTSE 100 giant Whitbread, called for VAT rates to stay at 12.5% “for longer” to help support hospitality firms.
Brittain said Premier Inn-owner Whitbread’s £100 million efficiencies program will help offset some rising costs, alongside a strong balance sheet and cash position.
But she said Whitbread, which also owns pub chain Brewers Fayre and steak houses Beefeater and Bar and Block, “would be expecting some costs to pass through” to consumers in the coming months. â
The company, which completed a £1 billion rights issue last June, has already raised wages and launched a staff retention bonus scheme for workers in summer.
Brittain said her company’s historically low churn rate and long term program for training young workers has helped it keep employees amid the national staffing crisis.
Whitbread said revenue for the six months to September was still 39% below 2019 levels at £662 million. Revenues per available room could return to pre-pandemic levels in 2022, rather than previous expectations for 2023, the company said.
But Brittain said Whitbread is not yet giving further margin guidance as her team is “watching to see how much of what we see in the inflationary environment is structural”.
Today's figures topped analyst expectations as the firm benefitted from the UK’s summer staycation boom.
Hargreaves Lansdown’s Nicholas Hyett said: “The course of recovery is unpredictable – with new restrictions a very real possibility. However, thanks to support from lenders, Whitbread has the balance sheet to weather disruption.”
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