Hollywood Bowl says minimum wage rise may lead to higher prices

The boss of Hollywood Bowl has said the firm may need to raise prices next year to cover a "quite painful" increase in the UK's minimum wage.

Hollywood Bowl says minimum wage rise may lead to higher prices
Hollywood Bowl says minimum wage rise may lead to higher prices

Chief executive Stephen Burns told the BBC the rise had meant an "unexpected hit" for the business.

His comments came as the UK's largest 10-pin bowling operator reported record sales for the year to September.

The National Living Wage for workers over 23 will increase to £11.44 per hour next April, from £10.42.

The government has also applied the same rate to 21 and 22-year-olds for the first time, lifting it from £10.18 an hour.

The rises represent a 9.8% increase for over-23s, and a 12.4% jump for workers aged 21 and 22.

Speaking to the BBC's Today programme, Mr Burns said the increase was "an unexpected hit - we budgeted for it to go up by around about 7.7%".

The new rate was "quite painful", he added, costing the company about £600,000 in the second half of the current financial year, and £1.2m on an annual basis.

"Clearly it's put a bit of pressure on," he said.

"We have managed to keep our prices pretty low to try and mitigate that but we may need to do something again towards the mid or the end of the year."

Hollywood Bowl reported record revenues of £215.1m for the year to 30 September, with the wet weather over the summer boosting sales as people headed indoors for entertainment.

The company - which runs 66 bowling centres in the UK and nine in Canada - said both July and August saw strong revenues, with August hitting a record high.

However, pre-tax profits were £45.1m, down slightly from £46.7m the year before.

The increase to the National Living Wage - the formal name for the minimum wage - was announced last month, ahead of the Autumn Statement.

The rise in the cost of living over the past couple of years has squeezed households' finances, with people on low incomes the hardest hit by higher energy and food bills.

However, the increase in the minimum wage rates has raised concerns from some in the retail and hospitality sectors.

The chief executive of trade body UKHospitality, Kate Nicholls, said the increase would "have significant knock-on impacts on costs".

And last week, the boss of electrical goods retailer Currys, Alex Baldock, said the minimum wage increase would fall on "already overburdened" businesses.

"For the retail industry as a whole, having a big hike in the national living wage at the same time as an expected half a billion pound increase in the rates bill just shows how little the government appears to understand or care about this industry."

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