Five Guys – Reeves’ tax raid has cost us £4m: John Eckbert, chief executive of Five Guys UK and Europe, has said Rachel Reeves’tax raid is slowing his growth plans, adding to the chorus of warnings from hospitality chiefs about the impact of the Budget. He told The Telegraph his business faced a £4m hit from increases to employers’ national insurance (NI) contributions from April. The increased costs will slow his company’s growth plans and lead to fewer jobs, he warned. He said: “Think about how many stores we could build – all this does is restrict our ability to invest and grow. If we had £4m more I would absolutely build more stores and hire more people. Every new store that we open creates 50 to 75 new jobs, it’s £1m in construction expenses and all the jobs that creates. So, there’s a huge knock-on effect for every investment that we make. We obviously can’t grow as fast.” That £4m accounts for the rise in national insurance contributions alone, before accounting for a 6.7% rise in the minimum wage in April. Eckbert said Five Guys’s costs would be “obviously more” as a result. He said there is a limit to how much companies like Five Guys can raise prices without denting sales. Eckbert said: “The NI – we can’t just increase prices to cover that £4m. We’re going to eat some of that increase.” Eckbert said the company had battled to keep its prices accessible, but had found itself vulnerable because of the limited number of ingredients it used, and the fact that they were fresh. He said: “The cost of beef is, like, £6.20 a kilo. It was £3 when we started, even five years ago. The price of beef has been incredibly tough for us to absorb. We’ve done everything we can to not raise prices. We’ve kept it as low as we possibly can and below what our cost is, so we’ve experienced margin compression as a result, meaning it makes a lower profit on each burger sold than it did a few years ago. Five Guys is a treat – we do really well on weekends and paydays, when you’re taking your family or your friends and you want the best burger you can buy. So, we are really sensitive to how hard our customers have worked to come in.” Five Guys features in the Propel 500 report, an unparalleled resource that profiles the UK’s leading hospitality operators ranked by turnover – which is available now. This comprehensive report provides more than 90,000 words of analysis, delving into company histories, leadership structures, site numbers and financial performance, making it an essential resource for industry professionals. A list of the operators included can be discovered now by visiting the Propel 500 page on Propel’s website. The guide is delivered in two parts: an introductory PDF, featuring deep dives into the top 25 companies and 6,500 words of insight from Propel’s expert writers, and a fully searchable Excel sheet, offering easy access to all the data. Key highlights include Mark Wingett’s exploration of mergers and acquisitions shaping the Top 500’s future, Tim Street’s view of the UK’s franchise market, and Phil Pemberton’s insights into experiential leisure as a hospitality cornerstone. Katherine Doggrell examines developments in UK hotels, while Mark Bentley, business development director at HDI, identifies emerging growth sectors, and Maria Vanifatova, founder of Meaningful Vision, analyses trends in quick service restaurants. Propel 500 is available now for £595 plus VAT. Existing Premium Club members can purchase it for £395 plus VAT. Premium Club members will receive the report for free on Friday, 28 February at 9am. Order the Propel 500 report today by emailing: kai.kirkman@propelinfo.com.

GDK has the opportunity to do with kebabs what McDonald’s did to burgers: Simon Wallis, chief executive of German Doner Kebab (GDK), has said that the brand has “the opportunity to do with kebabs what McDonald’s did to burgers, what KFC did to chicken, what Domino’s did to pizza or Subway did to sandwiches”. The brand grew to 177 stores by the end of 2024, propelled by 50 expanding franchisees, and it plans to open another 25 this year in the UK alone. It is Britain’s second fastest growing restaurant brand behind Wingstop. Wallis told the Mail on Sunday: “There aren’t many QSR brands that can lay claim to have more than 100 restaurants in the UK and take more than £20,000 per store per week. It’s a short list of McDonald’s, Domino's, KFC, probably Burger King, and us.” Just 4% of GDK’s trade comes after 11pm and it has had early success with the launch of a breakfast menu – though the group is looking to expand later trading hours with some franchise partners. The most recently published financial accounts for GDK’s Edinburgh-based parent group, Hero Brands, shows the brand absorbed losses of £1.4m in the US in 2023 “It’s important to be pragmatic,” Wallis said. “If you’re going into a new market, it’s going to take a bit of time to get it right. Those losses have been incurred because we’ve set up a supply chain, head office infrastructure and the legal framework to allow us to franchise in all the states we want to franchise in over there. To get it right and unlock the opportunity in the States and Canada, it’s about keeping focused on the economics, improving our franchisee profitability and demonstrating an equally compelling economic model to sell those channels.” Wallis said he expects franchisee profitability to improve by around £480 per store per week this year, because “there are further changes we’re making to try and offset the impact of continued labour inflation”. Wallis said: “We are in trial this year with more robotic shavers. These are robots that will cut the meat. We want to put ourselves in a position that we will mandate any new restaurant that opens in 2026 will only have robotic shavers, and that drives a huge labour benefit. A robot cuts the meat the same every single time. In our business, mastering your meat is the key thing that's going to drive profitability.”

Sacha Lord – hospitality businesses ‘thrown to the wolves’ by Labour: Sacha Lord, chairman of the Night Time Industry Association, has attacked the Labour government’s treatment of businesses and said the hospitality industry had been “thrown to the wolves” in the Budget. The Labour member and donor told The Telegraph he felt he could “only apologise” to the hospitality industry after telling it to vote Labour. He warned that the “cliff edge” facing firms in April as a result of changes to national insurance, the minimum wage and business rates would be greater than during the pandemic. It comes ahead of a report by Lord, with the Adam Smith Institute, which reveals that 85% of hospitality firms are planning to cut staff hours or salaries from April. The think tank’s Last Orders report – to be published later this week – reveals pressures on the hospitality sector mean that 9,000 pubs are at risk of closure. Lord spoke of the ongoing covid debt burden on the hospitality industry, saying: “We were shut completely, and now it just feels like we’ve been thrown to the wolves. And for the chancellor to stand in front of me, 13 June, and say she is the chancellor of growth and business, well, I’m sorry, but that’s wrong.” The increase in employers’ NI contributions, an increase in business rates and the minimum wage will mean the sector will be hit with a £3.4 billion tax bill, according to the report. It found the cut in business rate relief alone will mean pubs will have to sell an extra 60,000 pints a year just to cover the costs. It said 97% of firms have frozen investment plans and 99% will raise prices to cope with inflation. Independent businesses in the sector will be the hardest hit, and are looking at an increase in costs of between £30,000 and £80,000. Lord urged the chancellor to examine mitigating measures that could ease the burden on the sector, including deferring the business rate relief until 2026, when reforms to the levy are planned. His report also suggested introducing a sector-specific VAT reduction, as in parts of Europe, to provide immediate financial relief.

Regal Cineworld poised to float with or without UK arm: Regal Cineworld, one of the world’s biggest cinema chains, is gearing up for a multibillion-dollar float. The Times reports that bosses are understood to have compared investment bankers and advisers in the past fortnight and to be aiming for a New York listing in the final three months of this year. Their options include whether to float only the US arm or the entire group, which was effectively split in two after being forced into bankruptcy protection in 2023. It means that the UK business, known simply as Cineworld, could be sold separately. One source said the entire group could be valued at up to $4bn based on an assumption of eight years’ historical earnings of about $500m when it was listed on the London Stock Exchange. Another senior figure suggested the valuation would be significantly lower, estimating profitability had fallen to near $350m and that the business would be valued on a seven-times multiple at most. This would suggest it is worth closer to $2.5bn. Should only the US arm be floated, the valuation would be lower still. Bloomberg reported that JP Morgan and Barclays had been approached to oversee a potential float. A disparate group of dozens of hedge funds seized control of both the US and non-US arms of Regal Cineworld after the respective insolvencies. Last September, it was revealed that GoldenTree, the Wall Street fund behind hotel chain Travelodge, was among the funds now in control. Eduardo Acuna, the chief executive, said in December that the company had welcomed more than 49 million customers and generated total revenue of more than $1bn, with record-high levels of spend per person on concessions in July, August and September. The cinema market more broadly was then buoyed by a successful final three months of the year, benefiting from releases such as Gladiator II, Moana 2, Paddington in Peru and Wicked. UK cinemas had their best six months to the middle of December since 2018. Regal Cineworld declined to comment.