Advice

How to deal with the National Living Wage

By Mike Berry

- Last updated on GMT

How to deal with the National Living Wage

Related tags: National living wage, Minimum wage, Employment

Comment and advice from licensees, multiple operators and pubcos on how best to deal with the National Living Wage.

Dealing with the NLW: the multiple operators

Lawrence Hennigan, owner, Levenshulme Pub Company (Five sites)

“I’ve explained to my managers that we’ve got to work more professionally. That means not having the heating on all day, not having lighting on 24 hours a day, not having bar staff when we don’t need them. These might seem like little things but they make a big difference. Also, as an industry we have to start being cleverer about how we increase footfall and sales.”

Scott Whittaker, managing director, Ridge and Furrow Inns (Two sites)

“Most of our front of house and junior kitchen teams are under 24, so I expect little short term impact as these people come and go as they return to university. Employees aged over 24 that are in senior chef or management roles and are already paid at a higher rate than the national living wage. The only impact I can see for us is on labour costs for cleaners as they tend to be older.”

Barstaff

Jon Bassett, owner, JW Bassett Pubs (Five sites)

“We introduced the national living wage early to reward our staff for their efforts over the past few years. It’s raised morale and given everyone a bit of a lift. Everyone gets it, even if you’re a 14-year-old glass washer. I’ve never understood paying two people differently when they’re doing the same job. We aren’t in a position to make customers pay more. Some pubs maybe are a little unambitious with their pricing and could charge more, but we couldn’t do that.”

Dealing with the NLW: single site operators

Paul Egerton, Jolly Sailor, St Albans

Paul Egerton

“It affects my business a lot; people should get a decent wage, but some small businesses can’t afford it. In the future I will be swayed to employ more staff aged under 25, which isn’t necessarily fair. We aren’t going to pass costs onto the customer, but in the long run as wages keep rising, it’s got to come from somewhere so it’s an option.”

Janet Dooner, Railway Tavern, Stratford, London

Janet Dooner

“If you want good staff then you’ve got to keep them, and paying a good wage is the way to do that. The cost of living is very high. I understand it might be more difficult for pubs outside of London, but I wouldn’t want to pay anyone less [than the minimum rate] anyway. Staff make a pub what it is, so you’ve got to keep hold of good people.”

John Ellis, Crown Inn, Oakengates, Shropshire

John Ellis 2

“I’m looking at my rates bill, talking to suppliers and looking at whether we continue to stock certain products. Of course, in this business, you’re always looking at costs but because of the combined impact of the NLW, increased supplier costs, duty rises and pension enrolment later down the line, we have to look at things very closely.”

Dealing with the NLW: The pubcos

Duncan Garood, chief executive, Punch Taverns

“We welcome the introduction of the NLW; the hospitality industry relies on teams that are enthusiastic and motivated and receiving a decent wage is an important way to achieve this. However, we are mindful that the P&L of each pub is very tight, and appreciate this could be a concern for publicans. As such, we will continue to work with them to identify ways to grow their revenues which, in our view, is the most effective way of mitigating cost pressures.”

Lawson Mountstevens, managing director, Star Pubs & Bars

“It’s certainly the case that the NLW is a hot topic of conversation with our licensees. Recognising the likely impact on operating costs, we see our main role as helping licensees drive profitability through increased footfall, attractive new products and of course supporting savvy buying. We also helping licensees recruit talent and have launched an apprentices scheme to help licensees home grow and retain their bar, kitchen and managerial staff, and enable them to recruit apprentices via a free specialist service.”

Perfect pint training 1

Andy Hodgson, operations director, Admiral Taverns

“We place a very high priority on the support we offer our licensees to both manage their cost base and develop the overall profitability of their business. Last July we launched our Advanced Business Development Programme which addresses the challenge of how to manage costs, as well as how to increase turnover and profitability. In addition when the NLW was announced we factored it in to our rental valuation process and this is now fully reflected when we are reassessing the appropriate rents for our pubs.”

Mitchells & Butlers spokesman

“As an employer of 44,000 people it is always our aim to ensure that our employees benefit from terms and conditions that are competitive and reward the different levels of skill and responsibility across our workforce. We do not operate zero hours contracts and offer our employees access to a wide ranging benefits package including pensions, share schemes, subsidised meals on duty and employee discounts.

"The introduction of the National Living Wage is highly significant for our industry. Whilst it impacts on our cost base, we also recognise that it will give some consumers the opportunity to earn more, which may in turn benefit our business through increased spending. We continue to consider a number of factors in our approach to the introduction of the NLW including how technology can make our business more efficient, new ways of optimising productivity whilst also ensuring that our offers remain relevant to our guests.”

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