Young’s yesterday warned that staff hours will be cut and the price of a pint will increase as it adjusts to steep cost rises in the wake of Rachel Reeves’s Budget.
The pub operator revealed that it will face an £11million hit as a result of the Chancellor’s decision to hike employer National Insurance Contributions (NICs) and lift the minimum wage.
It is the latest company to outline how the NIC move will hurt jobs and consumers – despite Reeves’s claim that it will not hit working people.
Budget hangover: Young’s revealed that it will face an £11m hit as a result of the Chancellor’s decision to hike employer National Insurance Contributions and lift the minimum wage
Young’s chief executive Simon Dodd said prices across its 279 pubs are likely to rise by around 2 per cent to 3 per cent next year.
He said the group, which dates back to 1831, would also consider efficiencies such as cutting staffing hours on less busy days such as Monday lunchtimes.
Young’s will look for other cost savings in order to not pass on ‘all the cost to our loyal customers.’
Businesses were blindsided by Reeves’s decision to hike NI by 1.2 percentage points to 15 per cent from April, while a higher minimum wage and new employment rules will compound the pressure on firms.
Labour also lowered the threshold for when firms start paying employer NICs from £9,100 to £5,000 a year, which Dodd called the ‘biggest disappointment’ of the Budget.
He also said the sector needed ‘real clarity’ on what Labour’s proposed reforms on business rates would mean for the sector.
Despite storm clouds gathering in the industry, Young’s hailed a 27 per cent rise in sales to £250million over the six months to September 30 as profits were up 3 per cent to £25.3million.
Consumer confidence was strong ahead of the critical festive trading period, he added. ‘We are going into Christmas with some really strong bookings,’ Dodd said.
‘I think although there is a bit of doom and gloom out there, people still want to go to the Great British pub.’ Shares rose 2.2 per cent, or 20p, to 936p.
Michael Turner, chairman of rival pub company Fuller’s, warned earlier this week that the Budget was a ‘direct attack’ on industries that are ‘the lifeblood of our economy, while leaving the large City institutions that can afford to pay their share almost completely untouched’.
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