Mitchells & Butlers: Bar giant warns customers of price increases as costs expected to soar by £100m
The group, which also owns brands including Toby Carvery, said higher wage expenses are “by far the most significant increase” in its cost base following moves announced in last month’s Budget.
Chief executive Phil Urban said M&B is facing around £23 million a year in extra costs from the rise in national insurance contributions alone, with the increase in the minimum wage also sending its wage bill surging.
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Hide AdIn total, its costs will rise by around 5 per cent, or £100 million, in 2024-25 and Mr Urban said the group’s prices are likely to have to increase as part of efforts to mitigate extra expenses.


He said that prices are already expected to rise across the sector next spring, but added “we’ll probably have to go harder to cover the latest cost increases”.
He said the group – which employs about 45,000 people – will look at prices on a “site by site basis”, but stressed there are no plans to rein in recruitment or cut jobs.
“Having good service is critical,” he said.
Mr Urban’s comments came as M&B’s annual results showed it swung to a pre-tax profit of £199 million for the year to September 28, against losses of £13 million the previous year, with like-for-like sales up 5.3 per cent.
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Hide AdUnderlying earnings jumped 41.2 per cent to £312 million on a pro-rata 52-week basis.
The group said like-for-like sales growth had eased to 4 per cent in the first seven weeks of the new financial year, adding it expects “more normalised levels of sales growth as the inflationary environment eases”.
But M&B added a note of caution: “In the year ahead, the main uncertainties facing the group are considered to be the maintenance of sales growth in the face of pressure on consumer spending power, and the rate of cost inflation.
“The outlook for these is uncertain and will depend on a number of factors, including consumer confidence, global political developments, supply chain disruptions and government policies.”
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Hide AdM&B’s results also provided an update on its acquisitions of the Ego Restaurants and Pesto Restaurants chains.
The firm previously had a 40 per cent stake in Ego owner 3Sixty Restaurants and acquired the remaining 60 per cent in June 2023. M&B said it was “making good progress” on integrating Ego into its wider business and has converted five existing sites in Ego restaurants with up to 10 more planned next year.
In May this year, the company completed the acquisition of Pesto. It said the amount payable for the deal is partly contingent on its performance over the first year of trading under M&B ownership, but is not expected to be more than £15m.
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