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UK National Living Wage Menu Pricing Guide (2026): Convert April Rate Changes Into Item Prices

A practical UK guide for independent restaurants and cafes to convert 2026 National Living Wage increases into clear menu-price updates without guesswork.

Published Feb 14, 2026
uk national living wagemenu pricingrestaurant costscafe pricingowner operatoruk
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April wage updates are predictable. Margin shock is optional.

Most operators do not lose margin because the wage rate changed. They lose margin because they waited to convert that change into item-level prices.

Quick Summary

  • NLW (21+) moves to £12.21 from 1 April 2026
  • Convert wage change into monthly labour uplift first
  • Recover uplift through targeted item updates, not blanket increases
  • Recheck item contribution 14 days after rollout

Why This Matters in 2026

As of the ONS release for December 2025:

  • CPIH annual rate: 3.5%
  • CPI annual rate: 3.0%

At the same time, the UK minimum-wage table confirms April 2026 rate increases across age bands. That combination means labour and input pressure can hit together in Q2.

The Core Wage-to-Price Formula

monthlyLabourUplift = (newHourlyRate - oldHourlyRate) x affectedHoursPerWeek x 4.33
perItemRecovery = monthlyLabourUplift / monthlyUnitsSold

If denominator is 0, return 0 and fix your sales-volume input first.

Worked Example (Independent Cafe)

Assumptions:

  • Current 21+ hourly rate used in payroll: £11.44
  • New 21+ NLW from 1 April 2026: £12.21
  • Affected weekly hours: 260
  • Monthly units sold (top 12 items): 5,000

Step 1: Monthly labour uplift

monthlyLabourUplift = (12.21 - 11.44) x 260 x 4.33
                   = 0.77 x 260 x 4.33
                   = £866 (rounded)

Step 2: Recovery per item

perItemRecovery = 866 / 5,000 = £0.17

This does not mean every item gets +£0.17. It means your menu needs to recover that average uplift somewhere.

Where to Adjust First

  1. Labour-heavy builds (made-to-order sandwiches, breakfast plates)
  2. Low-contribution sellers with stable demand
  3. Add-ons/modifiers that are currently underpriced

Protect high-traffic value anchors until you see the first 2-week response.

14-Day Post-Change Scorecard

Track daily:

  • units sold by changed item
  • contribution per item
  • average spend per ticket
  • complaint/refund signal

Keep changes that improve contribution and do not trigger abnormal guest pushback.

Common Mistakes

  1. One flat percentage increase across the full menu
  2. Ignoring channel differences (delivery vs dine-in)
  3. Waiting for month-end P&L to react
  4. Raising price without checking labour minutes by item

KitchenCost helps you turn wage and ingredient changes into item-level price floors in minutes.

Try KitchenCost.

Sources (checked on 2026-02-14)

Frequently Asked Questions

How much is the UK National Living Wage in 2026?

From 1 April 2026, the UK government rate table shows National Living Wage (age 21 and over) at £12.21 per hour.

Do I need to reprice every menu item after wage changes?

Usually no. Start with labour-heavy items and low-margin sellers, then protect key value anchors where demand is price-sensitive.

What is the fastest way to estimate required price change?

Calculate monthly labour uplift from the new hourly rate, then divide by monthly units sold to get a per-item recovery target.

Should delivery and dine-in prices move together?

Not always. If delivery has higher channel deductions, use separate channel floors so one channel does not subsidise the other.

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