Marston's warns over impact of minimum wage hike

By James Pugh | Wolverhampton | Business | Published:

Marston's says it could be hit to the tune of £3 million by the planned hike in the minimum wage this April.

Marston's says it faces an increase in costs due to the planned minimum wage rise

The Wolverhampton-based beer and pub group said the hike was "higher than anticipated" and will increase its costs.

The rise of 6.2 per cent will bring wages to £8.72 an hour for workers 25 years and above and there is a 6.5 per cent increase for those aged 21 to 24.

Poor weather at the start of December also hit the brewery, which has 1,400 pubs which offset a strong Christmas fortnight.

Ahead of its annual shareholder meeting on Friday morning, the company also revealed pub sales during the 16 weeks to January 18 were up one per cent – although during the two weeks over Christmas, like-for-like sales rose 4.5 per cent.

On its beer business at the Marston's Brewery in Burton, the company said the amount sold is slightly down, due to weak sales of its lager through supermarkets and high street stores, rather than in pubs – although overall sales remain in line with expectations.

Marston's Chief Executive Ralph Findlay

The statement said: "The recently announced 6.2 per cent increase in the National Minimum Wage from April is higher than anticipated, and will increase second half year costs by a further c. £2-3 million."

Chief executive Ralph Findlay said: "Trading in the key Christmas fortnight was good and has remained solid since which is encouraging.


"Looking forward, greater clarity on the political agenda should positively impact consumer confidence.

"Overall the economic environment for the consumer looks encouraging with low unemployment and healthy wage growth providing us with increasing confidence that the market will grow in 2020."

The boss also said a planned debt reduction strategy is ahead of targets to cut borrowings by £200 million by 2023.

Marston's pointed out: "In the year to date, we have completed or exchanged on £60 million of disposals.

"Having originally targeted £40 million of disposal proceeds, we increased that to £70 million in November 2019 and today further increase the target to £85 million to 90 million."

James Pugh

By James Pugh

Shropshire Star Business and Farming Editor.


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