McDonald's, Nando's and Pret A Manger to cut prices

McDonald’s, Nando’s and Pret A Manger are among food chains planning price cuts for customers as VAT cuts come into force.

The UK Government has slashed VAT on hot meals, accommodation and attractions from 20% to 5% for the next six months.

McDonald’s said it is recommending a cut in the price of popular items on its menu and meal deals to its franchisees.

It said it intends to reduce the price of Happy Meals by 30p and breakfast meals by 50p, with price cuts also recommended for Big Macs, Quarter Pounders and McNuggets.

Pret A Manger said the price of its coffee will be cut from Wednesday following the VAT change, with the price of hot food to be cut from Friday.

The high street chain said the price of a takeaway latte will fall 35p to £2.40 as a result of the tax break.

Pret is one of a number of under-pressure chains to announce hundreds of job cuts to mitigate the impact of lockdown on its operations.

Rival KFC said it will reduce the price of sharing buckets by £1 and slash the cost of certain “fan favourites” by 50p.

Nando’s said it will pass on “100% of the benefits” from the tax break to its customers, helping to reduce the price of a quarter chicken by 55p.

The VAT cut does not apply to cold takeaway food, such as sandwiches or salads, and alcoholic drinks.

However, not all hospitality firms are expected to pass the full benefit of the tax cut on to customers, after taking a severe hit from the coronavirus crisis.

Chancellor Rishi Sunak announced the cut. (Henry Nicholls - WPA Pool/Getty Images) — Chancellor Rishi Sunak announced the cut. (Henry Nicholls – WPA Pool/Getty Images)

Last week, Chancellor Rishi Sunak announced the cut, which will remain in force until January 12, alongside plans to give people a 50% discount, up to £10 per head, to eat out in restaurants in August.

Prime Minister Boris Johnson’s official spokesman said: “We want businesses to pass on the benefit to customers if they can, and almost four-fifths of businesses said they did so in 2008.

“But we recognise that many of these businesses have been closed and without income for months, and decisions on prices are ultimately for businesses rather than the government.”