The chief executive of Five Guys has said the Chancellor's October Budget has cost the fast-food chain £4 million, warning that growth and job creation will be severely hampered.
John Eckbert, 57, told The Telegraph that the increase in employers' National Insurance contributions, due to take effect in April, would slow the company's expansion plans. He said the total cost could rise further when combined with the 6.7 per cent increase to the minimum wage.
Mr Eckbert said every new Five Guys store creates between 50 and 75 jobs, but the tax changes mean the firm 'obviously can't grow as fast'. He added that the Government had dismissed concerns raised by hospitality leaders about the impact on growth.
The Chancellor's Budget raised the rate of employers' NI from 13.8 per cent to 15 per cent and lowered the threshold at which employers start paying tax on workers' earnings from £9,100 to £5,000 per year. Mr Eckbert said the policy had not been 'thoroughly thought out'.
To remain sustainable, Five Guys may have to increase prices, he warned. The chain already charges five times more for a cheeseburger than McDonald's, and rising beef costs have squeezed margins further. Mr Eckbert said the firm had absorbed some losses, making less profit per burger than before.
A Treasury spokesman said the Budget aimed to 'kickstart economic growth' and levelled the playing field for high street businesses by cutting business rates and capping corporation tax.
