Pub Giant Feels the Sting of Soaring Steak Costs
The owner of the popular Toby Carvery and Miller & Carter chains has issued a stark warning as the surging cost of steak is set to add an eye-watering £30 million to its bills this year. Mitchells & Butlers (M&B), which also runs All Bar One and Harvester, revealed that steak prices have rocketed by nearly a third, creating a significant financial headache.
In response to this and other rising costs, the pub group has already implemented an average 3.2% price increase across its menus and drinks since the start of October. This move is a direct attempt to offset the immense pressure from what Chief Executive Phil Urban described as a "perfect storm" affecting global and UK beef supplies.
Strategic Shifts and Customer Concerns
Mr Urban was candid about the challenges, stating that the group cannot simply pass the full cost increase on to customers, who "just wouldn't eat steak" if prices became too high. He confirmed that the premium Miller & Carter steakhouse brand is expected to "go backwards this year" as a direct result of the price hike.
To adapt, M&B has taken strategic action. "Where steak is not the core product, we have reduced the number of steak and beef dishes or re-engineered the menu," Urban explained. He also noted that some competitors have removed steak from their offerings entirely. However, he firmly committed to not compromising on the quality of the meat or portion sizes for customers.
A Wider Landscape of Rising Costs
The steak price surge is part of a broader financial squeeze for the hospitality sector. Mitchells & Butlers anticipates total extra costs of around £130 million for the year ahead. This staggering figure is driven by a combination of the beef crisis and a soaring wage bill, exacerbated by the recent government announcement of a further 4.1% increase in the minimum wage from next April.
The recent autumn Budget delivered another blow, with expected surges in property tax payments for pubs and restaurants. Mr Urban labelled the property tax changes as "super disappointing," though he suggested larger groups like M&B would face only a "modest increase" compared to smaller, independent operators.
Despite these significant headwinds, the company's full-year results to September 27 showed resilience. Pre-tax profits actually rose by a fifth to £238 million. The group is fighting back with efficiency measures, including a new labour scheduling system, auto-ordering to manage stock, and energy-saving initiatives.
Looking forward, Phil Urban expressed optimism that the steak price inflation is a "blip" and hopes costs will normalise within the next year. For now, Britons looking for a affordable steak dinner may find their options changing at their local pub.
