UK restaurant operator Pizza's Hut is looking to raise more than £10m to help it cope with rising costs after business tax rises were announced in the Budget from last month.
The money could come from selling part of the business or from new investments from existing shareholders.
It comes amid a growing backlash from business owners who are warning an increase in employers' national insurance contributions and the national living wage would lead to higher costs for businesses that employ many workers low wages.
Heart With Smart (HWS) – which operates Pizza Hut's 140 restaurants in the UK – will use the money for new technology, including touchscreen ordering kiosks and contactless table ordering.
The new features would allow restaurants to save money by operating with fewer staff and are already being successfully tested in some Pizza Hut outlets, a company insider told the BBC.
They said this would result in a reduction in staff numbers, but the store does not expect a major layoff program.
From April 2024, the rate of employers' national insurance contributions, which are paid by businesses on top of workers' wages, will increase from 13.8% to 15%, and the starting level of contributions will fall to 5 000 £.
Combined with a 6.7% increase in the national living wage compared to April and an even bigger increase for 18-20 year olds, HWS expects to see its labor costs rise by $4 million. sterling, or around 14%, next year.
Chancellor Rachel Reeves has previously said businesses will “have to absorb” some of these costs through their profits.
In a letter with more than 200 signatories, hotel bosses told the Chancellor last week that the industry was being disproportionately hit by the “unsustainable” tax rise.
They warned it would “unquestionably” lead to business closures and job losses.
A number of companies, including Sainsbury's, M&S, BT, Wetherspoons, Fullers and JD Sports, have also suggested or warned that they may have to pass on some of these extra costs to customers by increasing prices.
But HWS believes it has limited capacity to do so because customers may not accept higher prices, the source told the BBC.
They said the decision to raise additional funds is not just the result of budgetary measures introduced last month.
This is the effect of the changes which come on top of five difficult years for the restaurant industry, following the pandemic, the cost of living crisis and labor costs which are already increasing.
Consultancy firm Interpath has been hired to manage the fundraising process, which was first reported by Sky News. Interpath declined to comment.
The Treasury has also been contacted for comment.
