The operator of Pizza Hut’s UK business could sell some of its restaurants after it revealed plans to raise more than £10million to help absorb extra costs following the Budget.
Heart With Smart (HWS) - which is in charge of 140 dine-in Pizza Hut restaurants in the UK - wants to use the money to invest in touch-screen ordering machines and remote table ordering. This could come from a sale of part of the business, or new investment from existing shareholders, reports the BBC.
The investments would allow Pizza Hut to operate with fewer staff - although reports suggest it would not lead to redundancies. HWS employs around 3,000 people and licenses the Pizza Hut name from Yum! Brands - but Pizza Hut delivery outlets are run separately by individual franchisees.
The advisory firm Interpath has been hired to run the process, which was first reported by Sky News. A spokesperson from Pizza Hut UK said: "As a well-renowned presence on the British high street, we have always been committed to creating the strongest possible future for Pizza Hut. We are supportive of HwS in its efforts to engage in an options process to ensure the future success of its restaurants. While this conversation is ongoing, we will not be commenting further."
Interpath declined to comment. It comes after Chancellor Rachel Reeves announced a £25billion tax raid on businesses after confirming a hike in employers’ National Insurance contributions. The rate of National Insurance paid by firms will rise from 13.8% to 15% from April 2025.
The earnings threshold for when employers start paying National Insurance will also be lowered from £9,100 per year to £5,000. However, the amount employers can claim back from their National Insurance bill will rise from £5,000 to £10,500 in a move that will help smaller businesses.
Experts have warned businesses may look to mitigate these costs with smaller wage rises or hiring freezes. It may also put them off increasing pension contributions beyond auto-enrolment minimums. Rachel Reeves did not announce any changes to National Insurance for employees.
A raft of major retailers have warned they will face a major hit following the Budget - and hinted this could also result in some pressure on shoppers. Signatories to a letter organised by UK Hospitality, and seen by The Sunday Times, have said that “some jobs on minimum wage will become unviable”.
The letter reads: “The changes to the NICs threshold are not just unsustainable for our business, they are regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon. Unquestionably they will lead to business closures and job losses within a year.”
Asda chairman Lord Stuart Rose has suggested there will be rising prices - but said the supermarket will do all it can not to pass extra costs on to consumers. Sainsbury’s has also warned of a £140million hit, while Marks & Spencer said it would mean £60million in extra costs, which will be pushed higher by an increase in the minimum wage.