Many food and drink companies in the United Kingdom have been raising prices by attempting to persuade customers to use more costly products in order to protect their profit margins from high inflation.
Mitchells & Butlers, a UK based restaurant and pub chain, was deemed “the best-placed pub operator to pass through price inflation of both food and whet sales”. According the the company's Chief Executive, Adam Fowle, steps taken in order to protect their margins include persuading customers to invest in higher quality products, as simple as investing in more expensive dishes.
As a result, the market predicts a small rise in Mitchells & Butlers net operating profit margin this year.
Similarly, Britvic, a leading UK soft drinks group, is following the trend at a slower pace, since it will have to wait until the second half of the year to pass on the costs of higher commodity prices. Britvic stated that “it expects to grow its earnings before profit, taxes, depreciation and amortization margin by 50 basis points a year over the medium term”.
Even though the U.K. Economy is in a fragile state, and is putting a significant amount of pressure on these food and drink companies, their profits are predicted to be rising at a slow yet steady pace.
http://online.wsj.com/article/BT-CO-20110127-705613.html
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