Young’s warns Labor Budget will increase pint prices and force cuts to staff hours
Young’s warned yesterday that staff hours will be cut and the price of a pint will rise as it adjusts to steep cost increases in the wake of Rachel Reeves’ Budget.
The pub operator revealed it will face £11 million in damages following the Chancellor’s decision to increase employers’ National Insurance Contributions (NICs) and lift the minimum wage.
It is the latest company to outline how the NIC action will hurt jobs and consumers – despite Reeves’ claim that working people will not be affected.
Budget hangover: Young’s revealed it will take an £11 million hit as a result of the Chancellor’s decision to increase employers’ national insurance contributions and lift the minimum wage
Young’s chief executive Simon Dodd said prices across its 279 pubs were likely to rise by around 2 to 3 per cent next year.
He said the group, which dates back to 1831, would also consider efficiencies such as reducing staff hours on less busy days such as Monday afternoons.
Young’s will look for other cost savings so as not to “pass on all costs to our loyal customers.”
Businesses were blindsided by Reeves’ decision to increase the NI by 1.2 percentage points to 15 percent from April, while a higher minimum wage and new employment rules will increase pressure on businesses.
Labor also lowered the threshold for when companies start paying employer NICs from £9,100 to £5,000 a year, in what Dodd called the Budget’s ‘biggest disappointment’.
He also said the sector needs “real clarity” on what Labour’s proposed business rates reforms would mean for the sector.
Despite storm clouds gathering across the industry, Young’s touted a 27 per cent increase in sales to £250 million in the six months to September 30, while profits rose 3 per cent to £25.3 million.
Consumer confidence was strong ahead of the crucial festive trading period, he added. “We’re going into Christmas with some really strong bookings,” Dodd said.
‘I think even though there’s a bit of doom and gloom, people still want to go to the Great British Pub.’ Shares rose 2.2 percent, 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 the major city institutions that can afford to pay their fair share are left almost completely untouched . ‘.
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