Wetherspoons boss Tim Martin warns of price rises after Budget tax blow to businesses

WETHERSPOONS boss Tim Martin has warned of price rises after last week’s Budget.

The pub chairman said it would aim to stay competitive on costs for customers but that all hospitality businesses faced the same pressures.

The chain’s tax bill is expected to rise by two-thirds next year after the Chancellor announced a hike in the national insurance for employers.

Martin said: “Cost inflation, which had surged to high levels in 2022, gradually diminished over the subsequent two years.

“However, it has now significantly increased again following the budget.

“All hospitality businesses, we believe, plan to increase prices, as a result.

“Wetherspoon will, as always, make every attempt to stay as competitive as possible.”

Wetherspoons anticipates that tax and business costs will increase by approximately £60million over the next year, including an estimated 67% rise in national insurance contributions.

Last week, Rachel Reeves hiked the employer rate of National Insurance (NI) from 13.8% to 15%.

She also announced a reduction to the threshold at which businesses start paying NI contributions from £9,100 to £5,000.

It’s estimated that the move will raise £25billion – the equivalent of around £800 per employee for each firm.

Businesses, particularly within the hospitality sector, have warned that the increased financial burden could lead to higher operating costs, which may ultimately be passed on to consumers through price rises.

Greg Johnson, analyst at City broker Shore Capital, predicts that the national insurance contributions could “add a further 5p to a pint”.

According to the analysis, Wetherspoon competitor Mitchells & Butler, the owner of All Bar One and Toby Carvery, will face a £40millon hit.

Price hikes are inevitable despite the Chancellor also cutting tax on draught beer in pubs by 1.7%, which Reeves said would take a penny of a pint.

However, other alcoholic beverages, including wine and whisky, will see a 3.6% increase as producers seek to offset the rising costs.

Wetherspoon’s latest warning on prices comes as M&S chief executive Stuart Machin also cautioned this morning that the long-term effects of the recent measures announced in the Budget remain “uncertain for now”.

The retailer reported a 20% increase in half-year profits, driven by strong sales growth in both its food halls and clothing division.

On Tuesday, the chief executive of Primark’s parent company Associated British Foods said he felt “the weight of tax rises” in the Budget were falling on the UK high street.

He said the company’s national insurance bill would rise by “tens of millions” of pounds.

Meanwhile, Wetherspoon said its sales grew about 6% in the 14 weeks to November 3, compared with the same period last year.

Mr Martin said this marked “record” sales for the first quarter of the group’s financial year.

Wetherspoon is set to open nine new locations this year, including new establishments at London Bridge Station, Fulham Broadway Underground in London, and Manchester Airport.

Over the past year, the pub giant sold five of its pubs, resulting in a cash inflow of £2.4million.

The company now boasts a trading estate of 797 pubs.

The latest warning on prices follows a promise not to hike prices after years of high inflation in the cost of living crisis.

Tim Martin told The Sun in June that he would not increase food and drink prices for the rest of the year.

In an exclusive interview Tim said: “We are hoping to keep prices as they are for the rest of the calendar year on food and drink

“I’d said we’d manage on breakfast before, but we can now go much wider.

“I’m telling Sun readers we will keep the prices the same.”

At the time, Martin said he could make the pledge as cost pressures for the business were finally easing and inflation was coming down.

Sharp price increases have significantly eased since inflation peaked at 11.1% in October 2022.

By June 2024, the rate of inflation had fallen to 2%, indicating that prices were increasing at a much slower pace compared to the previous two years.

Whetherspoon last raised drinks prices at all pubs by 3.95% in February 2024.

As a result, the price of a pint of Leffe Blonde at London’s popular Moon Under Water branch in Leicester Square increased from £7.09 to £7.30.

Although the same pint cost just £6.85 in August 2023, when prices were previously raised before the February 2024 hike.

Despite inflation easing and Tim Martin’s pledge in June not to raise prices, the pub giant did increase prices at its airport venues in July.

Airport rates surged by up to 30p per pint, or as much as 4%, hitting summer travellers in the pocket once again.

However, since February 2024, pint prices at your local high street Spoons have stayed at their current level.