Itsu has posted its third consecutive annual loss as the Asian food-to-to chain blamed surging inflation and Labour hikes to employment taxes for its rising costs.
The edamame eatery, founded by the grab-and-go tycoon behind Pret a Manger, said the UK’s fast food industry is suffering from fragile consumer confidence and a rising tax burden.
In its latest accounts, the group’s directors said the industry “continued to face pressured customer volumes as consumers managed persistent inflation and higher interest rates”.
“Policy-driven cost increases (including the change in employers’ National Insurance rates) added to wage and food cost inflation,” the sushi seller added.
Retailers and hospitality firms say Labour’s hikes to employer national insurance contributions (NICs) at the 2024 Budget are still weighing on their ability to hire workers, and have urged Chancellor John Healey to wind them back.
Above-inflation hikes to the national minimum wage are also weighing on employers, industry bodies have said.
Itsu said: “Pay levels and related employment costs increased during 2025, with additional pressure from the change in employers’ NI rates.” These extra costs “weighed on margins,” the company said.
Itsu hikes till count to drive spend
The fast-food chain suggested it has resorted to cutting staff to keep up with rising employment costs. “Despite ongoing labour efficiency initiatives, the broader inflationary environment continued to place pressure on margins,” it said.
“Food inflation also remained a headwind, although it was largely well-controlled through effective supplier relationships and disciplined range and pricing management,” the group added.
The rate of food inflation is set to reach four per cent in December and climb higher to 6.4 per cent by July next year, according to Food and Drink Federation (FDF) forecasts.
Itsu said it managed to defy these tough conditions by growing its revenue by 2.8 per cent to £124m and slimming its pre-tax loss to £5.2m from £6.7m in the prior year.
The group said it is pushing investment into its sites in a bid to drive customer spend. It refurbished 20 shops in 2025, improving their layouts to “enhance customer flow and service”.
The fast-food chain has mandated a minimum of two tills at each of its upgraded shops to maximise transactions, and moved its fridges towards the door to encourage grab-and-go spend.
Itsu was founded in 1997 by Julian Metcalfe, who had founded sandwich chain Pret a Manger the decade before. The group, headquartered in Victoria, London, operates about 80 sites in the UK.
Bridgepoint, a London-based investment firm, is weighing up a sale of its minority stake in the restaurant group, according to Sky News. The private equity backer is poised to offload its shareholding within months and Metcalfe is keen to attract another major investor to replace it, it has been reported.