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Young’s warned yesterday that staff hours will be cut and the price of a pint will rise as it adjusts to sharp cost increases in the wake of Rachel Reeves’ budget.
The pub operator has revealed it will face an £11m hit as a result of the Chancellor’s decision to increase employers’ National Insurance Contributions (NICs) and raise the minimum wage.
It is the latest company to outline how the NIC measure will hurt jobs and consumers, despite Reeves’ claim that it will not affect workers.
Budget hangover: Young’s revealed it will face an £11m hit as a result of the Chancellor’s decision to increase employers’ national insurance contributions and raise the minimum wage.
Young’s chief executive Simon Dodd said prices at its 279 pubs were likely to rise by between 2 and 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 lunchtimes.
Young’s will look for other cost savings so as not to pass on “the entire cost 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 compound pressure on businesses.
Labor also reduced the threshold at which companies start paying 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 business rates reforms would mean for the sector.
Despite the dark clouds gathering in the industry, Young’s hailed a 27 per cent rise in sales to £250 million during the six months to September 30, while profits rose 3 per cent to £25, 3 million.
Consumer confidence was strong ahead of the critical holiday trading period, he added. “We’re coming into Christmas with some really strong bookings,” Dodd said.
“I think even though there is a bit of pessimism, people still want to go to the British pub.” The 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 great institutions of the city that can pay their part. ‘.
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