UK's Fuller Smith to tread carefully on price hikes despite rising costs, CEO says
By Raechel Thankam Job
(Reuters) -British pub chain Fuller, Smith & Turner will take a cautious approach to increasing prices, CEO Simon Emeny said on Wednesday, as the group navigates rising costs from higher taxes and minimum wage hikes.
Companies across the country had flagged an increase in labour costs related to a rise in employers' social security contributions and minimum wages following Finance Minister Rachel Reeves' maiden budget last year.
Reeves, who had also introduced the biggest tax increases in three decades, is set to present a multi-year spending plan later on Wednesday.
Fuller, which operates premium pubs across the UK, expects to incur 8 million pounds ($10.79 million) in additional costs.
"Like everybody in the sector, we have had to raise prices during April to help us navigate this extra cost burden placed on us by the chancellor, but we've kept those as low as possible," Emeny said, adding that the group will be cautious about further price hikes into the year.
Although Fuller did not provide any indication about its expectations for the current fiscal year, which began on March 30, like-for-like sales in the first 10 weeks rose 4.2%, slightly lower than the 4.4% growth seen last year.
For the year ended March 29, the group reported an adjusted pre-tax profit of 27 million pounds, above analysts' estimate of 24.7 million pounds, according to a company poll.
Shares of the company rose as much as 2.2% before reversing course to fall 2.2% as of 1003 GMT.
Peel Hunt analysts said in a note they expect maintaining managed like-for-like sales growth to offset ongoing cost inflation to be the main catalyst for shares in the ongoing fiscal year.
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