Pret a Manger is increasing the price of its coffee subscription service by 25% as the cost of milk, coffee beans and staff pay goes up.
The coffee shop chain said the monthly fee for up to five barista-made drinks a day would rise to £25 from £20 from 3 February for new subscribers, and from 16 March for those already signed up.
The increase comes less than two months after the advertising watchdog advised Pret, which has about 400 shops in the UK, to rethink how it advertised its subscription service launched in September 2020, after receiving thousands of complaints about options on the deal not being available in some outlets.
Pret blamed the imminent price rise on inflation and the government’s planned increase in VAT to 20% from 1 April, from 12.5% at present. It said VAT would add £2 to the cost of the subscription, £1.50 would go towards extra staff pay and a further £1.50 to cover inflation.
“We believe the Pret coffee subscription continues to offer great value,” the company said in an email to customers.
Coffee is one of the everyday basics whose price has risen significantly during the pandemic as one of the biggest producers, Brazil, suffered from droughts and the worst frost in over two decades while shipping costs soared.
It is understood that the price Pret pays for its Arabica coffee beans is likely to rise 40% this year from 2020 levels.
The cost of producing milk has soared by nearly a quarter as increased labour and machinery costs have combined with the rising price of cattle feed, driven by inflation in fertiliser costs, which are linked to surging gas prices.
Coffee shops in the UK are experiencing further inflationary pressure as they battle for staff after many workers returned to Europe during the pandemic and have not returned post-Brexit.
Last month, Pret increased pay for its workers for the second time in four months from a minimum of £9.40 an hour to £9.80. More than 6,900 of its 8,500 UK staff will now earn at least £10 an hour. That came after pay was put up 5% in September.
In September, rival chain Costa gave its workers a 5% pay rise to £9.36 an hour while Itsu, the Asian-inspired fast food chain, increased minimum hourly pay by 11% to a minimum of £10.40 an hour.
Jeffrey Young, the chief executive of the World Coffee Portal, said coffee shops had also had to deal with an increase in the cost of importing equipment such as coffee machines from Europe after Brexit while even paper cups were more expensive.
He said: “Energy costs, the costs of repairing and maintaining buildings, insurance – all of that has gone up substantially,” prompting an average 10p-a-cup rise in the price of a coffee across the UK while profits are still under pressure.
Businesses fear that shoppers, who are squeezed for cash amid widespread inflation, will rein in spending at cafes and coffee shops which are struggling to get back on their feet after numerous high-street lockdowns.
“When VAT goes up it could be catastrophic,” Young said. “Operators will have to go higher [on price].”
