Five Guys Faces £4m Tax Hit: Jobs and High Streets Hang in Balance

John Eckbert, chief executive of Five Guys in the UK and Europe, has issued a dire warning: Chancellor Rachel Reeves’s Budget will slam his burger chain with a £4 million cost increase, driven solely by higher employers’ National Insurance (NI) contributions. This financial burden, he asserts, will stall expansion plans, snuffing out new jobs and construction investment when Britain’s economy craves momentum.

The October Budget’s £25 billion tax haul on businesses has sparked widespread alarm, nowhere more acutely than in hospitality. Employers’ NI will rise from 13.8% to 15% from April, with the taxable threshold plunging from £9,100 to £5,000 per worker annually. For Five Guys, reliant on part-time staff, this shift hits hard. “A good bit of that £25 billion comes from hospitality, and disproportionately so,” Eckbert said, highlighting the sector’s vulnerability.

Each new Five Guys store generates 50 to 75 jobs and £1 million in construction, a boon for local economies. With £4 million diverted to NI, Eckbert calculates several outlets won’t materialise. “This restricts our ability to invest and grow,” he stated, a view shared by UKHospitality’s CEO Kate Nicholls. She warned on X that “for every £1 employers spend on NI hikes, that’s £1 less for wage rises, jobs, or cutting prices for hard-pressed consumers,” framing Eckbert’s plight as part of a broader crisis.

A 6.7% minimum wage hike in April will push costs beyond the £4 million NI figure, Eckbert noted, compounding pressure on Britain’s beleaguered high streets. He sees food and beverage as key to their revival—“This doesn’t help,” he rued. Price increases offer no easy fix. A Five Guys cheeseburger, at £10, already dwarfs a McDonald’s Big Mac at £4.79, leaving little room to pass costs onto customers battered by inflation. “We can’t just raise prices to cover that £4 million,” Eckbert admitted. “We’ll absorb some of it.” Beef prices, up from £3 to £6.20 per kilo in five years, further erode margins despite efforts to hold the line.

Consumers feel the strain, too. On X, one diner griped, “£10 for a burger now? Might as well grill my own,” a sentiment hinting at dwindling footfall if prices climb further. Hospitality peers echo the gloom: Wetherspoons faces a £60 million cost rise, while small operator Nick Evans, running three unprofitable venues, braces for an extra £50,000, axing his HR role to cope. Yet Five Guys remains the focal point—a chain of 171 UK sites and £542.9 million in 2023 sales, now at a crossroads.

The government touts growth, funnelling £22.6 billion to the NHS and offering business rate relief. A Treasury spokesman insisted the Budget “wipes the slate clean” to “kickstart economic growth,” but the Office for Budget Responsibility (OBR) predicts 50,000 job losses by 2029, with scant GDP gains. Think tanks warn of damage to low-paid sectors, clashing with Labour’s economic pledges.

Eckbert’s frustration peaked after lobbyists met a dismissive “well, too bad” from officials, suggesting a policy blind spot. As 2025 nears, Eckbert sees a financial hit and a blow to the high streets and workers the Chancellor claims to champion. Will this Budget ignite recovery—or dim its flickers?