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Wagamama Owner Warns Of Rising Prices As Latest To Report Supply Chain Pressures |  Economic news

The owner of restaurant brands including Wagamama and Frankie & Benny’s has warned of price hikes as it becomes the latest company to count the cost of supply chain tensions and worker shortages.

Andy Hornby, managing director of the Restaurant Group, told Sky News inflation was “inevitable”, signaling a shortage of drivers and revealing difficulties in hiring chefs.

The group, whose shares fell 7%, was one of many listed companies to disclose similar issues when submitting trading statements to the exchange on Wednesday.

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“Inevitable” that prices go up – Owner of Wagamama

Mixer maker Fevertree, home builder Redrow, model train company Hornby and car dealership Pendragon have all highlighted supply chain concerns in their latest updates.

They join a series of well-known brands in the economy – from McDonald’s and Nando’s to Marks & Spencer and furniture company for doing it.

The companies were struggling with problems linked to both the pandemic and Brexit which are worsening supply chains and sometimes leading to a lack of product availability.

The cost of managing this – for example by paying drivers more money – reduces profit margins or is passed on to customers in the form of higher prices.

Mr Hornby told Sky’s Ian King Live: “It’s inevitable, given what’s going on in the supply chain, that there will be some inflation because no matter where you look, there are pressures – whether it is the number of drivers, whether it is the number of preparers for the suppliers. “

The general manager said he wanted to pass on as little as possible to customers.

Wagamama Owner Warns Of Rising Prices As Latest To Report Supply Chain Pressures |  Economic news
Frankie & Benny’s is also part of the Restaurant group

He added that recruitment for the group’s restaurants was “extremely uneven” with particular problems finding staff “in the back”.

“There is no doubt that there are fewer chefs than the market needs right now,” Hornby told Sky News.

Comments come after the supermarket Iceland warned earlier this month that the shortage of truck drivers would push prices up.

Mr Hornby was speaking as Restaurant Group reported a loss of £ 58.8million for the 27 weeks through July 4, up from a loss of £ 234.7million a year ago – the latest results covering a period when it was still held back by pandemic restrictions.

But the group, which operates 400 pubs and restaurants across the UK, noted “good progress” as sales recovered after the lockdown was lifted.

Elsewhere, Fevertree, which sells tonic water and other high-end blenders, stressed the pressure on its profit margin thanks to “global logistical disruptions and cost pressures.”

He reported a 32% like-for-like global sales increase for the first half of the year, aided by continued strong non-commerce trade – sales through retailers, including retailers. supermarkets, and a 17% increase in profits to £ 25.3million.

But the group said “headwinds” in logistics costs and rising ingredient prices would continue to dampen profits.

Wagamama Owner Warns Of Rising Prices As Latest To Report Supply Chain Pressures |  Economic news
Fevertre highlighted global logistical disruption and cost pressures Pic: Fever-Tree

Shares rose 8%.

Meanwhile, homebuilder Redrow reported a jump in profits for the year as of June 27 to £ 314million, more than double the previous year’s profits, helped by the vibrant property market.

But he revealed he has been hit by supply disruptions, including shortages of steel, lumber and cement products – though he expects the pressures to start to kick in. subside.

Car dealership Pendragon, whose brands include Evans Halshaw and Stratstone, rebounded to half-year profit of £ 28.4million after losing £ 41.4million a year ago, but said he “anticipated a continuing shortage” of new and used vehicles.

Global chip shortages are holding back the supply of new cars – a shortfall which has repercussions on the second-hand market.

Hornby, the model maker, said in a statement that sales in the April-August period were slightly lower than a year earlier, but that he had a “very strong” order book.

But the group warned, ahead of the key holiday season, that “timing is of the essence when it comes to Christmas and we are aware of the continuing potential supply disruptions at ports.”

The shares fell 8%.