Pub group Fuller’s has revealed a £3 million hit from the Budget move to increase employers’ national insurance contributions and joined the growing list of firms warning over price hikes to offset the impact.
Chiswick-based Fuller, Smith & Turner – which has 5,500 staff – said it would need to raise prices for customers across its hotels and pubs as it faces a significant cost increase.
The group said that together with the planned increase in the minimum wage, which was also announced in the Budget, it will be facing an extra £8 million bill next year.
The Chancellor's actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy
Simon Emeny, chief executive of Fuller’s, told the PA news agency: “We won’t be able to afford to just take the £8 million hit to the bottom line, so there will be price increases and it will be inflationary.”
He said it was “too early” to say what impact the Budget blow will have on its investment plans, but said others in the sector were reining in spending as a result, which will lead to some hospitality firms having to cut back on recruitment.
But Mr Emeny stressed: “Our customers want a high level of service so it’s imperative we don’t compromise on that.”
He added: “For a Government that was supposed to be stimulating economic growth, it will do the exact opposite.”
In the group’s half-year results out on Wednesday, Fuller’s chairman Michael Turner also took aim at the Chancellor over the tax hike.
He said: “The Chancellor’s actions are a direct attack on those labour-intensive industries that are the lifeblood of our economy, whilst leaving the large City institutions, that can afford to pay their share, almost completely untouched.
“The unintended consequences of these actions will be to drive inflation higher, put pressure on wages, and will drive many businesses to the wall.”
It comes after the likes of Sainsbury’s, Marks & Spencer and Asda have cautioned prices will probably need to rise to counter the extra costs.
We expect an even stronger summer in 2025
Despite the Budget woes, Fuller’s – which runs around 370 venues across the UK – cheered a “very strong” first half, with underlying pre-tax profits jumping 21% to £17.6 million in the six months to September 28.
Mr Emeny said a boost from pop star Taylor Swift’s sell-out concerts at Wembley over the summer helped drive sales at its hotels and pubs, with like-for-like growth of 5.5% for food, 4.9% for drink and 4.9% for accommodation over the first half.
With Oasis and Coldplay concerts lined up for next year, Mr Emeny said: “We expect an even stronger summer in 2025.”
