What April's wage rise costs you per sandwich

The National Living Wage rose to £12.71 an hour in April for workers aged 21 and over, up 50p from £12.21. The 18 to 20 rate went up rather more sharply, by 85p to £10.85, and 16 and 17 year olds and apprentices moved to £8.00.

It's worth doing the arithmetic rather than absorbing the headline, because in this trade the answer usually isn't the one people expect.

Take one person on the adult rate, working forty hours. The 50p increase is £20 a week. Employer's National Insurance sits on top at 15% of pay above the secondary threshold, which takes it to roughly £23 a week - though if you're claiming the Employment Allowance, which is £10,500 a year and covers most small employers, you may be paying no employer's NI at all. Worth checking with your accountant which side of that line you're on, because it makes a real difference. Call it £23 a week, then, or a shade under £1,100 over a working year.

This is the bit that changes the conversation. That £23 a week spread over 500 items sold is 4.6p an item. Spread over 150 items, it's about 15p.

Both of those are less than most people's instinct, and the gap between them is the whole point. The wage rise didn't really change your costs per sandwich. What decides your cost per sandwich is how much you sell in the hours you're already paying for.

The reflex is to put 20p on a baguette. It's understandable, it's visible to every customer you have, and it recovers four times what you actually needed. A round of price rises also tends to cost you a few marginal customers, which pushes your volume down, which pushes your cost per item back up - exactly the wrong direction.

The lever that actually moves is idle time. A member of staff standing at a counter between twelve and half past, waiting to see who walks in, costs the same as one who is making orders that have already been sold. A driver sitting outside an office waiting for people to come down and choose costs the same as one who drops a bag and moves on. That's where the money in a lunch business quietly goes, and it's a much bigger number than 50p an hour.

Work out your own sales per staff hour. Not per day, per staff hour. It's a five-minute job with a week's takings and a rota, and it's the number to watch from now on.

Then look at where the paid hours are going that aren't producing anything. If half an hour of every shift is spent waiting for customers to decide, that's the cost to attack, and it's attackable in a way that the minimum wage isn't.

Orders placed and paid for before a cut-off convert a good deal of that waiting into work. You start the day knowing what has to be made, the queue at the counter is collecting rather than choosing, and the same hours produce more. That's the only version of "absorbing a wage rise" that doesn't end up on the price list.