UK Pizza Hut to raise funds after monetary schedule responsibility hikes
UK Pizza Hut to raise funds after monetary schedule responsibility hikes
The operator of Pizza Hut’s restaurants in the UK is looking to raise more than £10m to assist it cope with increased costs after responsibility rises on business were announced in last month’s monetary schedule.
The money could arrive from a sale of part of the business, or recent financing distribution from existing shareholders.
It comes amid growing backlash from business owners who alert rises in employers’ national insurance contributions and the National Living Wage will push up costs for business which employ lots of low-wage workers.
Heart With intelligent (HWS) – which operates all 140 UK dine-in Pizza Hut restaurants – will use the money on recent technology including touch-screen ordering kiosks and contactless table ordering.
The recent features would allow restaurants to save money by operating with fewer staff and are already being trialled successfully in some Pizza Hut outlets, a corporation insider told the BBC.
They said it would outcome in reduced staff levels, but the store does not expect a major redundancy programme.
From April 2025 the rate of employers’ national insurance contributions, which are paid by businesses on top of workers’ salaries, will rise from 13.8% to 15%, and the level where contributions commence will fall to £5,000.
Combined with a 6.7% boost in the National Living Wage and an even bigger rise for 18 to 20-year-olds, HWS expects to view its labour costs rise £4m, or about 14%, next year.
Chancellor Rachel Reeves has previously said businesses “will have to absorb” some of these costs through their profits.
In a note with over 200 signatories, hospitality bosses last week told the chancellor the industry was disproportionately impacted by the “unsustainable” responsibility hike.
They warned this would “unquestionably” factor closures and job losses.
A number of businesses, including Sainsbury’s, M&S, BT, Wetherspoons, Fullers and JD Sports have also hinted or warned that they may have to pass some of those extra costs on to customers by increasing prices.
But HWS feels it has limited ability to do this as customers may not receive higher prices, the insider told the BBC.
They said that the selection to raise the extra money is not just the outcome of monetary schedule measures introduced last month.
It is the result of the changes on top of five challenging years for the restaurant business, following the pandemic, the expense-of-living crisis and labour costs which are already rising.
The advisory firm Interpath has been hired to run the capital raising procedure, which was first reported by Sky information. Interpath has declined to comment.
The Treasury has also been approached for comment.
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