The popular pan-Asian restaurant chain Wagamama is preparing to introduce selective price increases to its UK menus in 2026, as it grapples with rising operational costs.
Mounting Cost Pressures on the Business
According to reports, the company has informed investors it anticipates significant increases in key expenditure areas. Labour and food and drink costs are expected to surge by 4% to 5%, while other overheads like rent are forecast to climb by 2% to 3%. The chain noted that energy costs are not part of this projected rise.
This financial squeeze is driven by several external factors. A major contributor is the government-mandated increase to the National Minimum Wage, set for April 2026. From that date, the hourly rate for workers aged 21 and over will rise by 4.1% to £12.71. Even steeper increases are scheduled for younger staff, with the rate for 18 to 20-year-olds jumping 8.5% to £10.85 an hour.
Furthermore, businesses continue to feel the impact of the 2024 Budget, which saw employer National Insurance contributions increase from 13.8% to 15%.
Company's Strategy: Streamlining and Value Focus
In response to these challenges, Wagamama is pursuing a dual strategy of cost management and customer retention. The company is planning to streamline its operations with the goal of saving £8 million next year.
A spokesman for Wagamama emphasised the brand's commitment to value, stating: "We have deliberately avoided major price increases and invested in our customer proposition. We are seeing improved volumes on the back of this investment and our performance is ahead of the broader dine-in casual dining market."
The spokesman added that any pricing review in 2026 would remain "firmly focused on providing our customers strong value for money."
Broader Financial Context for The Restaurant Group
The news comes against a backdrop of significant restructuring for Wagamama's parent company, The Restaurant Group. Recent accounts filed with Companies House in October 2025 revealed the group recorded a pre-tax loss of £32.2 million for 2024, widening from a £19.6 million loss the previous year, despite revenue growing from £824 million to £868.1 million.
The group also confirmed a reduction in its overall headcount from 17,542 to 15,468 employees during its last financial year. It attributed this largely to the sale of the Frankie & Benny's chain in late 2023.
In a statement, the company's board highlighted the "upward pressure on wage costs" and noted that positive consumer sentiment from interest rate cuts was eroded by concerns over the employer National Insurance increase. The group stated it continues to focus on food quality and service while managing its cost base to protect margins.
