Profits at Britain’s 100 biggest restaurant groups have fallen by almost half in the past year as hospitality businesses grapple with mounting employment costs. The Times reports that the country’s largest restaurant companies based on turnover, which include PizzaExpress and Five Guys, together generated £204m in profits according to analysis by accountants UHY Hacker Young. The figure, from research conducted in July and based on each company’s most recently filed accounts, marks a 44% decline on the £365m the companies made a year earlier.

While the total is considerably higher than the £673m loss made during the pandemic in 2021, the drop highlights how steep increases in employers’ national insurance contributions and the national minimum wage are eating into profits. However, Britain’s biggest restaurant businesses, which also include The Restaurant Group, owner of Wagamama; Lemon Pepper Holdings, which operates the Wingstop franchise in the UK and Ireland, and Zizzi and Loungers, generated revenues of £13.3bn in the past year, up from £12.9bn a year before.

As well as higher employment costs, restaurants are also struggling to combat rising prices of ingredients such as olive oil, beef, chocolate and coffee. Measures these businesses have taken to increase sales and protect margins, included offering more chicken menu options to capitalise on consumers’ desire for protein, expanding their drinks menu with mocktails and implementing QR code menus and investing in automated payment systems to cut printing and staff costs.