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Wagamama owner to raise chef wages as staffing crisis bites

·3-min read
Wagamama is owned by The Restaurant Group    (PA Wire)
Wagamama is owned by The Restaurant Group (PA Wire)

Wagamama owner The Restaurant Group is to put up chef wages in areas hardest-hit by the hospitality sector’s ongoing labour shortage.

Chief executive Andy Hornby told the Standard the group, which is also behind Frankie & Benny’s, will make the move as part of a whole host of measures to attract staff.

Wagamama has struggled to hire enough chefs. The pan-Asian chain’s CEO, Thomas Heier, told the Press Association last week that the chain was facing difficulties at around a fifth of its 144 sites.

Hornby said: “We are doing a whole host of stuff. It’s not just headline wages, but the way tips are shared, the way team workload is shared.

“The chef population is an area where there is some very targeted investment in wages.”

He added: “We’re not doing a one-size fits-all rise [for chefs]. It’s a question of seeing which restaurants and which part of the country have particular shortages.” The firm also plans to train up chefs through a new apprenticeship scheme.

There is an ongoing labour shortage affecting restaurant and café chains, and many are launching hiring sprees and raising wages. Costa announced last week that it would be giving a 5% pay rise to 14,500 staff working at its company-owned UK stores.

A combination of Brexit and Covid has seen many workers return to their home countries, while some furloughed staff have taken up jobs in other sectors as hospitality faced long periods shuttered and uncertain re-openings over the past 18 months.

Hornby said: “We can all adjust wages but that isn’t enough. What you really need to do is try to get your work structures right to make Wagamama the most appealing place to work in the UK restaurant industry, and that’s what we’re trying to do.”

In its update to the City on Wednesday TRG cautioned over both ongoing labour shortage and supply chain issues, which Hornby expects to be “obvious pressures for the next year or 18 months”.

The group, which has around 400 pubs and restaurants around the UK, said sales dipped by 4.6% to £216.8 million for the six months to July 4 as lockdowns took a toll.

The firm had been burning through £5.5 million per month in lockdown, had slashed 3000 jobs and permanently closed over 200 sites since the pandemic hit.

But Wagamama saw 21% like-for-like growth between indoor reopening on May 17 and August 29, with its pubs business reporting 14% growth in the period. Suburbs like Richmond and Enfield are seeing booming trade, Hornby said.

In May TRG announced it had secured £450 million in new debt facilities and completed a long-term debt refinancing to help see it through the pandemic and boost growth.

On Wednesday the firm said Wagamama has the potential to grow to 180-200 sites in the coming years, with at least five new delivery kitchens set to be established each year.

Hornby said delivery now accounts for nearly 25% of Wagamama sales, up from around 10% in the same period in 2019. The CEO said the growth in delivery sales, along with a staycation boom and pent-up demand, helped the chain see the significant like-for-like sales growth over summer.

Overall delivery sales grew 146% in the eight weeks leading up to August 29.

Third Bridge analyst Harry Barnick said the soaring delivery sales being seen even after restaurants reopened suggests the Covid shift towards takeaways is “structural rather than temporary”.

Hornby said the most popular order for delivery is the same as for the chain’s in-house customers – its signature chicken katsu curry.

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