Starbucks, Nando’s, KFC, Pret and JD Wetherspoon have joined McDonald’s in saying they will pass some or all of the VAT cut to customers.
McDonald’s yesterday recommended franchisees cut prices on Big Macs, Quarter Pounders and Chicken McNuggets.
Starbucks, meanwhile, says it will pass on the full 15% discount on coffee served in stores that are operated by the company, although those under franchise have been left to make their own decisions over pricing.
Nando’s has said it will pass on “100% of the benefits” to customers, reducing the price of a quarter chicken by 55p.
Pret will reduce the price of a takeaway latte by 35p from Wednesday, before doing the same with its hot food offer from Friday.
KFC will reduce the price of sharing buckets by £1, and put a 50p reduction in place on certain “fan favourites.”
Wetherspoons has also announced price cuts on food and drink, including alcoholic drinks, even though they are not eligible for the VAT reduction.
The announcements have led to concerns of an unfair playing field being created between large companies that can afford to cut prices and independent restaurants that will not be able to.
“It’s clear where all of the Chancellor’s new support measures are working best, and it’s not for SMEs and the independent sector which is so badly represented within our industry,” Hospitality’s Union’s Jonathan Downey said.
“Wetherspoons, McDonald’s, Starbucks and Pret have all announced that they are passing on the VAT savings, whilst smaller businesses are looking at holding on to the benefit in a desperate effort to keep going.
“This, along with all the other new measures, has completely divided our industry.”
Downey also questioned the wisdom of the Government’s Eat Out to Help Out discount scheme, and the Job Retention Bonus.
He said any company able to pass on the full 15% VAT reduction did not need help with a voucher scheme, and certainly should not benefit from for keeping jobs that were not ever at risk.
“This, in particular, is an astonishing waste of taxpayer cash that is being lapped up by the large corporates and who can blame them?” he added.
D&D London chairman Des Gunewardena says his restaurant group would be making price cuts, but that it would not be passing on the whole of the VAT reduction.
He says menu prices will be reduced by 7.5% with the other 7.5% taken as an increase in margin.
“Overwhelmingly, the VAT reduction needs to be used by restaurants as we are doing, mainly to help our profitability, because we are all losing money,” Gunewardena said.
Operators lower prices after VAT cut
Starbucks, Nando’s, KFC, Pret and JD Wetherspoon have joined McDonald’s in saying they will pass on VAT cuts to customers. McDonald’s yesterday recommended franchisees cut prices. The announcements have led to concerns of an unfair playing field being created between large companies that can afford to cut prices and independent restaurants that will not be able to.