Azzurri: Staff shortages impacted by business rates

The Azzurri group, which operates the Ask Italian and Zizzi casual dining brands, is finding new ways to cope with staff shortages, while at the same time raising the issue of “outdated” business rates.

Steve Holmes, Azzurri’s chief executive has also suggested that business rates, which are calculated according to rent values in 2015, need to be revamped to reflect “where the revenue is taken,” so that tax on high street premises is not disproportionate.

Speaking to the FT, Holmes said: “For all those businesses that don’t have the same tax regime as those on the high street it means they can pay staff more . . . It’s not just the rates bill that puts pressure on [high street] businesses, it’s the knock-on effect of that. They then can’t compete on wages so they lose their staff.”

The hospitality industry has campaigned for an overhaul of the rates system. According to campaigners, the current system places a disproportionate tax burden on high street sites versus warehouses locations used by online operators such as Amazon.

In 2019, Azzurri paid about 4.4 per cent of its overall turnover in business rates, while Amazon reported a total tax rate as a proportion of its turnover of about half that.

Restaurants and shops had been given a 15-month holiday from business rates during the pandemic but since the end of June, it is being gradually withdrawn

Similar to other operators, Holmes said that Azzurri was lacking one or two chefs per restaurant on average and was finding ways to increase the productivity of existing staff instead. 

Across the group’s c.200 sites, £10m is being spent on installing high powered ovens that halve average cooking times to four minutes and a new kitchen management system that aggregates orders for dining in and delivery and prioritises them according to cooking time.

“It does the thinking that a head chef would have to do, which means the chefs are just available to cook rather than organise,” said Holmes, who suggested that that restaurant margins are too thin simply to put up wages.

His comments come as a business survey suggests the UK labour market is in crisis, with the shortage of workers limiting the country’s economic rebound. Around three quarters of businesses reported access to labour as a threat to the UK’s labour market competitiveness, data by the Confederation of British Industry in partnership with Pertemps Network Group Employment Trends Survey showed on Monday. Nearly 8 in 10 businesses interviewed in August said that access to skills was among their top current concerns.