Whitbread to raise prices to combat cost of National Living Wage

The group - which owns Premier Inn and Costa – said it would also be investing in staff training to improve productivity following the rise.

From next April all hospitality businesses will have to pay staff over 25 years of age a minimum wage of £7.20 per hour, a move which has received a mixed response in the industry​.

Andy Harrison, chief executive at Whitbread, said: “We shall mitigate this substantial cost increase over time with a combination of productivity improvements, boosted by investment in systems and training, efficiency savings and some selective price increases.”

The announcement comes as the company revealed its total sales rose 11.1 per cent year-on-year for the 24 weeks to 13 August.

It credited the ongoing expansion of its Premier Inn brand as boosting profits, with sales at the hotel chain up 12.9 per cent year-on-year following an 8.1 per cent increase in available rooms. 

The group plans to open a further 5,500 UK rooms, including 1,300 extensions, this year.

Harrison said: “We are continuing to deliver our ambitious organic growth plans with another good quarter.

“Our first half performance keeps us on track to deliver full year expectations, as well as our ambitious growth milestones."

The company confirmed it would release full details of its plans to adopt the National Living Wage alongside the announcement of its interim results on 20 October.