Whitbread to raise prices on minimum wage hike

Whitbread one of Britain’s biggest employers, plans cost savings and will raise some of its prices to counter the substantial impact of enforced wage increases at its Premier Inn hotels and Costa Coffee businesses.

The British government announced a bumper pay increase in July, with the current £6.50 (€8.87) minimum wage set to rise to £7.20 for those aged over 25 from next April. 

Renamed the “living wage”, the rate will grow over the following four years to £9.35 an hour, a far greater increase than Whitbread and other businesses had expected.

Whitbread said as a result, it was developing plans to increase the productivity of its staff and systems and would introduce selective price rises. Detailed plans will be given at its half-year results on October 20.

“Whitbread has been a long standing supporter of a steady, sustained real increase in the national minimum wage,” Whitbread chief executive Andy Harrison told Reuters yesterday.

“(However) the scale of the increase is bigger than we would have expected and clearly employment costs are our biggest single cost.” 

Whitbread employs around 42,000 hourly paid staff on a wage bill of £460m, around 18% of group turnover. Of that number, some 34,000 are paid under £7.20 an hour.

Reuters


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