Pub Giant Forced to Increase Prices as Costs Soar
The owner of popular pub chains including Toby Carvery and All Bar One has been compelled to raise menu prices for customers in response to a dramatic surge in operating costs. Mitchells & Butlers (M&B), one of the UK's largest pub and restaurant operators, has announced an average menu price increase of 3.2 per cent to counter an anticipated £130 million in additional costs for the coming year.
What's Driving the Price Hikes?
According to a statement released on Saturday 29 November 2025, the company is facing a perfect storm of rising expenses. A staggering 30 per cent surge in steak prices has particularly impacted their Miller & Carter steakhouse brand. This has been compounded by a soaring wage bill and increasing property taxes, creating significant pressure on the business's bottom line.
M&B's chief executive, Phil Urban, addressed the challenging situation, stating that the group cannot pass the full burden of these cost increases onto its customers. The company has instead adopted a multi-pronged approach, which includes adjusting menus and reducing steak dish offerings in some of its eateries. Urban emphasised that the company "will not compromise on quality or portion size" despite these financial pressures.
Strong Financial Performance Amid Challenges
Remarkably, despite these significant cost pressures, M&B reported a 20 per cent rise in pre-tax profits to £238 million for the year ending 27 September. This impressive performance was aided by successful savings initiatives and energy-saving measures implemented across the estate.
The company also saw like-for-like sales growth of 4.3 per cent over the full year, though this momentum showed signs of slowing in the latter part of the period. Growth decelerated to 3.2 per cent in the final quarter and 3.8 per cent in the first eight weeks of the new financial year, which the company attributed partly to consumer uncertainty ahead of the recent Autumn Budget.
The situation highlights the ongoing challenges facing the UK's hospitality sector as it navigates post-pandemic recovery amid persistent inflation and changing consumer spending habits.
