Cost of living: Pizza Hut warns price hikes are inevitable as dining chains face ‘perfect storm’

The boss of Pizza Hut in the UK and Ireland has warned customers it is inevitable that prices will have to rise to account for surging inflation, made worse by difficulties across the sector in finding new staff.

Neil Manhas said while the business was doing its best to shield diners at restaurants and at home from rising costs, this would not be sustainable in the longer term.

He was speaking hours after the Office for National Statistics revealed that the headline measure of inflation had hit an annual rate of 7% in March, driven up by higher fuel, energy, food and fashion costs.

There is growing evidence that inflation is taking a toll on household spending habits and consumer confidence and Mr Manhas said that Pizza Hut, like its rivals, was no stranger to the cost pressures as it became the latest brand to warn over the gloomy price picture – made worse by the Russian invasion of Ukraine.

Neil Manhas said ‘the pressure’s on’ for finding staff at Pizza Hut

“We’re now looking at around low double digit cost inflation, which obviously is significant right across food and packaging.

“And that goes across dairy, across wheat, across meats, oils, vegetables, there’s very little at the moment that is untouched through this.”

He went on to explain that further inflationary pressure was being applied through vacancies as the business struggles to attract workers.

“Yeah, it’s a bit of a perfect storm. I would say the hospitality sector generally is short-staffed.”

He continued: “I think right now for our business, we have over 1,500 vacancies, about 1,000 of those are drivers – delivery drivers… We also have bold plans to open 50 Pizza Huts this year, which would create another 1,200 jobs.

“So certainly the pressure’s on in terms of finding the right staff, the right people in our service, our business.

An Inc driver stands next to an Amazon delivery truck in Los Angeles, California, U.S., May 21, 2016
Demand for delivery drivers has exploded since the start of the pandemic

“And then obviously in the last couple of years, you’ve gotten the acceleration of demand for all things delivery, food delivery, or otherwise… there’s a lot of pull for drivers just in general.

“So again, you have a blend of those two elements, that leads to inflationary pressure.”

He said of the likelihood of price rises ahead: “We will continue to work every single lever we can before we have to get to a place where we’re passing some of this back to consumers, but we have to be honest, it’s inevitable that some of this will make its way back to consumers.

“The business model can only withstand so much.”

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