Chancellor’s business tax raid will add up to 15p to price of a pint, warns pub chief
THE Chancellor’s business tax raid will add up to 15p to the price of the pint, says the boss of Toby Carvery and All Bar One pubs.
Mitchells & Butlers yesterday said it now faces £100million of extra costs, with almost a quarter of the hits directly due to unexpected changes to employers’ National Insurance contributions.
Phil Urban, chief executive, said it was “perversely ironic” for Rachel Reeves to go after retail and hospitality, which “employ the most people and had been hit hardest by Covid”.
He claimed the rise in business costs would add 10p to 15p to the price of a pint.
He added that her “white rabbit out of a hat” move of taking a penny off a pint was “disingenuous… it is garbage to say I’ll take a penny off but clobber the industry with X, Y, and Z”.
His comments follow rival pub boss Simon Emeny of Fuller's warning of higher costs to customers, while Sir Tim Martin at Wetherspoons said all hospitality firms would have to increase prices due to the Budget.
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Mr Urban continued on the Chancellor’s £25billion blow to business: “I don’t think she gets it. I don’t and it’s quite worrying.”
The Chancellor this week tried to reassure businesses that there would be no further tax rises or borrowing.
But the Prime Minister and Business Secretary Jonathan Reynolds have been careful not to make the same pledge.
When asked if he had confidence in Ms Reeves’s promises, Mr Urban gave an emphatic “no”.
Mitchells & Butlers has only just fully bounced back from Covid with full year profits of £199million, compared to a £13million loss last year.
It said like-for-like sales were 5.3 per cent higher in the past year as punters bought fewer but more expensive drinks. The business, which also owns Harvester, employs 44,000 people in over 1,700 pubs and restaurants.
Pet's Home truths
SHARES in Pets at Home took a pounding yesterday after it warned profits would be lower as the boost from the pandemic pet boom fades.
Boss Lyssa McGowan said the firm was still registering 15,000 puppies a week to its VIP club — more than before the pandemic — but this has almost halved since lockdowns encouraged Brits to get a dog.
As a result, profits are now expected to be only slightly higher than last year’s £132million, compared to earlier targets of £144million.
Shares in the company fell by as much as 14 per cent yesterday.
Ms McGowan said she couldn’t rule out further price increases on pet food and accessories after the business faced an £18million hit from the “unexpected” Budget cost increase.
Aviva go direct in £3.3bn bid
AVIVA last night launched an audacious £3.3billion takeover of smaller rival Direct Line.
The insurer went public with its offer one day after Direct Line’s board secretly rejected a 250p-a-share bid.
It said that it was offering a 59.7 per cent premium to Direct Line’s share price and any deal would “deliver attractive returns for shareholders, including unlocking value that is inaccessible to Direct Line standalone”.
The takeover approach by Aviva is Direct Line’s second suitor this year after rejecting an earlier £3.2billion proposal from Belgian rival Aegeas.
In the months in between, new boss Adam Winslow has launched a £100million cost-cutting scheme but has disappointed investors with lower than expected first half profits.
Loyalty's good for savings
SUPERMARKET loyalty cards are not a swizz after all, says the competition watchdog.
Stores have increasingly used the schemes — such as Tesco’s Clubcard, Sainsbury’s Nectar, Asda’s Rewards and Morrisons More — to offer cheaper prices to members.
It has become their biggest weapon against the rise of discounters Aldi and Lidl.
But a Competition and Markets Authority probe found 55 per cent of people believe retailers increase their “usual” prices to make loyalty deals.
However, its analysis of 50,000 loyalty priced products by the CMA found that 92 per cent of the time loyalty prices offer a “genuine saving”.
It cautioned that this was not always the cheapest on the market and shoppers could still benefit from shopping around.
It also said chains should do more to include those without smartphones and under-18s who miss out on deals as they cannot access loyalty apps.
Aston in £80m hit
ASTON MARTIN saw more than £80million wiped off its value yesterday after a second profit warning in two months.
Britain’s only publicly listed car firm also put out a £210million cash call — hoping to raise £110million to help with the cost of electric cars and £100million to bolster its balance sheet.
The maker of James Bond’s favourite car disappointed investors further by saying profits will be 8 per cent lower at £280million due to delays with its new £2million Valiant cars.
easyJet's soaring on profit
EASYJET’S outgoing boss says that he is leaving the airline flying high — after posting a 34 per cent rise in headline profits to £610million.
Johan Lundgren, who is jetting off from the company after seven years of running it, said that the results were a step towards “our goal of sustain-ably generating over £1billion annual profits”.
He coped with pandemic travel restrictions, a rescue financing, air traffic control meltdowns and also developed its package holiday firm — which now makes up 30 per cent of the company’s profits.
Kenton Jarvis, who will take over next year, said the airline expected its holiday business to grow by a quarter as it adds more long routes to North Africa and the Canaries.
But he criticised Chancellor Rachel Reeves’ decision to increase air passenger duty, which he said was “not pro-growth” — and will lead to flights being more expensive.
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FOOD delivery firm Just Eat Takeaway is delisting from the London Stock Exchange in another blow to the City.
Chiefs blamed the “administrative burden, complexity and costs” associated with keeping an LSE listing.