The owner of Zizzi and Ask Italian restaurants has announced plans to continue expanding its restaurant portfolio, despite rising costs facing the hospitality sector in the coming year due to Labour’s looming tax hike.
Azzurri Group, which operates around 230 locations and also runs Coco Di Mama, remains optimistic about the future of UK hospitality. This is despite the recent trend of restaurant and store closures sweeping the nation.
The looming restaurant openings come despite recent warnings from industry leaders, including executives from Greene King and Whitbread, who cautioned ministers that increases in National Insurance contributions could trigger business closures and job losses.
The group says it expects to benefit from increased wages and reduced borrowing costs over the next year. “While UK consumer confidence continues to be impacted by global macroeconomic conditions, falling inflation, interest rate cuts, and rises in wages, means we are cautiously optimistic,” the company stated.
In its latest report, Azzuri posted a strong financial performance, with revenues growing by 18.3 per cent to £303.1million for the year ending June 30. Earnings more than doubled from the previous year, rising to £32.1million from £14.3million. The company has also reported “encouraging” Christmas trading across its venues.
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A popular restaurant chain has confirmed plans to open more sites despite the looming tax raid from Labour
PA / AZZURI GROUP
These results come as part of what the group describes as a transformational year, moving from a pure-play restaurant operator to becoming the UK’s leading hospitality investment platform.
The positive financial performance appears to be supporting the group’s expansion ambitions, with plans to open new sites across all its businesses in the coming year.
Steve Holmes, chief executive of Azzurri Group, expressed satisfaction with the company’s performance, stating: “We’ve had a successful year with the group continuing to grow both sales and profits.”
He highlighted the strategic transformation of the business, noting: “It has also been a transformational year for the business strategically as we moved a pure-play restaurant operator into the UK’s leading hospitality investment platform.”
Job losses could be a consequence of Reeves’s National Insurance raid GETTY Looking ahead, Holmes maintained a positive outlook, saying: “We are cautiously optimistic of an ongoing recovery in hospitality in 2025.” He added: “We have strong businesses that will continue to thrive and look forward to another year of positive development.”
As part of its expansion strategy, Azzurri Group is targeting growth for its recently acquired Boojum brand in both the UK and Ireland. The company has also ventured into new territory with the opening of its first UK Daves Hot Chicken site.
The American brand, which counts Drake and Samuel L Jackson among its celebrity backers, represents Azzurri’s latest franchise partnership. These developments form part of the group’s broader plans to open new sites across all its business operations over the next year.
The expansion strategy builds upon Azzurri’s existing network of approximately 230 locations across its various restaurant brands. Earlier today, Shoe Zone confirmed plans to close multiple stores in a blow to Britain’s high streets.
The chain, which operates 297 stores, cited Chancellor Reeves’s decision to raise the National Insurance rate for employers to 15 per cent as being the primary contributing factor.
In a statement, Shoe Zone shared: “Consumer confidence has weakened further following the Government’s Budget in October 2024, and as a result of this Budget, the Company will also incur significant additional costs due to the increases in National Living Wage and National Insurance.
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Inflation has risen once again GETTY“These additional costs have resulted in the planned closure of a number of stores that have now become unviable. The combination of the above will have a significant impact on our full-year figures.”
This morning, the Office for National Statistics (ONS) published the inflation figures for the 12 month to November 2024 with the consumer price index (CPI) rising to 2.6 per cent over the period.
Amy Knight, small business commentator at NerdWalletUK, said: “Businesses across the food industry, leisure and hospitality are already bracing themselves for higher wage bills on top of the jump in National Insurance Contributions from April.
“If January brings a slump in consumer spending, we could see trading hours reduced as firms look to limit unnecessary overheads. As staff costs increase along with the price of many foods, pubs, cafes and restaurants will start the year searching for the sweet spot between forging ahead with investment and keeping sufficient financial reserves.”
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