Popular pan-Asian restaurant chain Wagamama is preparing to implement selective price increases on its UK menus in 2026, as it grapples with rising operational costs across the board.
Breaking Down the Rising Cost Pressures
According to reports in The Times, the company has informed investors that it anticipates significant increases in key expenditure areas. Labour and food and drink costs are forecast to climb by 4% to 5%. Meanwhile, other overheads such as rent are expected to rise by 2% to 3%, although energy costs are not currently cited as a primary driver.
This financial squeeze is partly attributed to government policy changes. The National Living Wage for workers aged 21 and over is scheduled to increase by 4.1% in April 2026, taking the hourly rate to £12.71. More dramatically, the rate for 18 to 20-year-olds will jump by 8.5% to £10.85 an hour.
Furthermore, businesses continue to feel the impact of the increase in employer National Insurance contributions, which rose from 13.8% to 15% in the 2024 Budget.
Company Strategy: Cost-Cutting and Value Focus
In response to these challenges, Wagamama's parent company, The Restaurant Group, is planning substantial operational efficiencies. The chain aims to save £8 million next year by streamlining its operations.
A company spokesman emphasised a cautious approach to pricing, stating: "We have deliberately avoided major price increases and invested in our customer proposition. We are seeing improved volumes on the back of this investment and our performance is ahead of the broader dine-in casual dining market."
The spokesman added: "We will review our pricing during 2026, remaining firmly focused on providing our customers strong value for money."
Broader Financial Context for The Restaurant Group
The potential price adjustments come against a complex financial backdrop for the group. Its latest accounts, filed with Companies House in October 2025, show The Restaurant Group recorded a pre-tax loss of £32.2 million for 2024, widening from a £19.6 million loss in 2023. However, revenue saw growth, increasing from £824 million to £868.1 million.
The company also significantly reduced its workforce, with headcount falling from 17,542 to 15,468. This was largely attributed to the sale of the Frankie & Benny's chain in late 2023.
In a statement, the company's board acknowledged the easing of food inflation but highlighted persistent pressures: "The upward pressure on wage costs continued with a further significant increase in the National Minimum Wage... The positive impact of interest rate reductions on consumer sentiment was also quickly eroded by the Autumn Budget statement."
The group says it continues to focus on food quality, customer service, and managing its cost base, while investing in initiatives like its new 'Soul Club' loyalty scheme.
