Founder of Pret a Manger warns that restaurant prices are set to rise by more than a fifth because of the soaring cost of staff
- Julian Metcalfe said the pandemic had brought a ‘perfect storm’ which made ‘massive’ wage increases to up to £15 per hour inevitable
- The entrepreneur, who is now chief executive of Itsu, said his shipping costs were four times higher than pre-pandemic
- Pubs and restaurants have struggled for staff, leading some to increase wages, while a shortage of lorry drivers has also led wages to rise
- Industry leaders have reported a rise in the price of meat and fresh produce of up to a seventh, while beer prices around London have rocketed
The founder of Pret a Manger has warned that restaurant prices are set to rise by more than a fifth because of the soaring cost of staff.
Julian Metcalfe, 61, said the pandemic had brought a ‘perfect storm’ which made ‘massive’ wage increases to up to £15 per hour inevitable.
The entrepreneur, who is now chief executive of Itsu, said his shipping costs were four times higher than pre-pandemic.
‘Perfect storm’: Pubs and restaurants have struggled for staff, leading some to increase wages
Pubs and restaurants have struggled for staff, leading some to increase wages, while a shortage of lorry drivers has also led wages to rise.
In addition, industry leaders have reported a rise in the price of meat and fresh produce of up to a seventh, while beer prices around London have rocketed.
Firms have cut their menus to reduce costs in the kitchen, while others have increased the price of side dishes or alcohol. Seaside towns are facing the toughest price pressures as record demand from staycationers meets a shortage of hospitality workers.
Metcalfe said he expected to push wages for staff up by as much as £5 per hour, equivalent to £9,100 per year, as he opens 24 new restaurants.
He said: ‘The cost of labour and ingredients is sky-rocketing. Soon prices in restaurants are going to go up… it could be 20, 30, or 40 per cent.
‘Yes of course we’re going to have to put up wages massively. It’s a perfect storm.
‘A McDonald’s for two in Zurich is 26 euros (£22), and they still have access to the EU labour pool in Switzerland – we don’t. There’s no law that says that McDonald’s has to sell a cheeseburger for 99p any more, it could be £1.99.’
James Almond, whose family runs four pubs in the North-West, said the recruitment crisis is forcing wages up. He said: ‘It’s going to cost me more to pour a pint or put a meal on a plate. I would happily charge £8 for your pint of beer if customers would pay.’
The price of some of his wines has gone up by one tenth.
Kate Nicholls, chief executive of UK Hospitality, said: ‘There’s significant food price and wage inflation.’
Clive Black, of Shore Capital, said: ‘Restaurants and hotels have to rebuild their balance sheets and generate cash and make up for the massive loss of earnings over 18 months.’
But prices may be held in check if customers vote with their feet. One analyst said: ‘Twenty to 40 per cent is cloud-cuckoo-land. Restaurants are already struggling to compete with ready meals and home cooking.’