Labour has ‘unbelievably harsh stance’ on big businesses
It is “unbelievable” that the Labour government has “taken such a harsh stance” on big businesses, the chief executive of restaurant chain Pizza Express has said.
Speaking on an up-coming episode of CityAM’s Boardroom Uncovered podcast, Paula MacKenzie said the industry had been “somewhat decimated” by the Covid-19 pandemic and has then been hit by ever increasing taxes.
She also hit out at Chancellor Rachel Reeves’ hike in employers’ National Insurance contributions in last year’s Budget for making it harder for young people to get their first job in the hospitality industry.
On Reeves’ first Autumn Budget in October last year, the Pizza Express boss said it was “brutal” for her business as well as the industry at large.
The CEO added Reeves’ Budget was “unexpected” and “really was tough”.
Discover the Boardroom Uncovered podcast from CityAM here.
Pizza Express CEO: ‘It’s just really hard’
Speaking on the Boardroom Uncovered episode, MacKenzie said: “It has been really difficult, hasn’t it?
“I joined Pizza Express in the Summer of ‘22. But of course, the sector had been really, and I’m not going to use exaggerated language, but somewhat decimated by Covid as well.
“At least the QSR – the quick service restaurant industry – got open but casual dining and hospitality at large was really shuttered a lot by that.
“Candidly, I studied economics at university, so I feel like an economist by training. It’s just unbelievable to me that the Labour Party has taken such a harsh stance around businesses that employ people at large and people at scale.
“A paper round was my first job, but my first job when I was then 16 or so was bar work like a lot of people’s first job – restaurants, waitressing, waitressing, etc.
“To be almost taxed through the employers’ National Insurance contributions and everything else, it’s just really hard when actually most people’s first foray into employment is in some kind of hospitality venue.”
‘Brutal’ Budget no help to restaurant chain
While all eyes are currently trained on this year’s Budget, due to be delivered on 26 November, the boss of Pizza Express told the Boardroom Uncovered podcast the impact Reeves’ first edition has had on the company.
She said: “That was brutal for us, candidly, like it was for everyone in the sector – and unexpected.
“I’m not saying anything that anyone else in the sector wouldn’t say, it really was tough.
“But again, it makes you stronger, tough times. I don’t really like wallow in the ‘is it tough?’
“Tough businesses get stronger. Tough times make people, we will get stronger and we have got stronger.”
Certainly, the increase in taxes announced last year will not have helped Pizza Express’ finances which suffered a tough 2024.
CityAM reported in September that the chain slashed its value by more than £40m last year as its pre-tax losses slashed its value by more than £40m.
Accounts filed with Companies House also showed its revenue slipped from £454.5m to £442.1m over the same period.
In the UK and Ireland, the chain’s sales fell by 2.7 per cent and by six per cent in its international markets.
On its losses, Pizza Express said its profit before tax exceptional charges for 2024 was £4.3m, up from a loss of almost £2m in 2023.
Pizza Hut woes reveal industry pressure
The Boardroom Uncovered interview with the boss of Pizza Express comes as the company behind the restaurant arm of rival Pizza Hut collapsed into administration for a second time this year.
The firm owed almost £30m as it collapsed with the loss of more than 1,100 jobs last month.
Yum! Brands, which owns the Pizza Hut name, then bought the business of DC London Pie and a substantial number of its assets for £3.7m.
The deal included 64 Pizza Hut restaurants and 1,254 employees which meant that 79 sites were closed and 1,160 jobs were lost.
DC London Pie had taken over Pizza Hut’s restaurants in Britain when their previous owner, Heart With Smart (HWS) collapsed earlier this year.
In a document filed with Companies House, administrators FTI Consulting said Pizza Hut was impacted by increased pressures from food inflation and labour costs as well as the rise in the National Living Wage from April 2025 “which had not been passed on in full to the consumer”.
Pizza Express CEO makes shrinkflation promise
Like so many restaurants across the country, Pizza Express has been forced to raise its prices in recent years in reaction to a surge in costs from the likes of inflation and tax hikes.
But its CEO is adamant that the quality of the food her restaurants serve every day will not suffer.
MacKenzie said: “I will never sacrifice on the quality of the food. It’s just not in my DNA.
“So you don’t see us do shrinkflation or anything like that. But you will have seen, and it’s widely reported, that prices have to rise to cover the cost inputs that one has, whether that’s the food, whether that’s the people, whether it’s the rent, the rates or all of those things.
“We just try, really candidly, and make sure that we’re charging a fair price for the thing that you’re getting. And the customer still feels that value for money.
“And we track our value for money scores maniacally. But those are the kind of things you are trying to take out.
“Cost where it doesn’t do anything, be more efficient and put the things that the customer values in front of them.”
All eyes on Budget 2025
While MacKenzie would not be drawn on what she would like to be included in Reeves’ Budget on 26 November, she did say she hoped the Chancellor would listen to the comments made by industry bodies warning against further tax hikes for businesses.
The Boardroom Uncovered interview was recorded before Reeves made a rare pre-Budget speech this morning (4 November) in which she refused to rule out hiking taxes on millions of Brits as she said everybody will have to “contribute” to fix the UK economy.
The Chancellor said her second Budget would look to address the low productivity, curb inflation in order to prompt fresh interest rate cuts and focus on getting debt levels down to reduce borrowing costs.
She also refused to get drawn on the taxes she might raise at the Budget but said that the country faced “big challenges”, with many emerging since last year’s £40bn tax hike on businesses and other groups across the UK.