Burger King May Cut Up To 1,600 Jobs In UK As Pandemic, Rents Pressure Chain

Fast food retailer giant Burger King warned that 1,600 jobs may be cut in the U.K. due to the ravages of the ongoing coronavirus pandemic.

Alasdair Murdoch, the chief executive at Burger King U.K., told BBC that the company could permanently close up to 10% of its stores, placing up to 1,600 jobs on the block.

The Burger King chain has more than 16,500 staff in the U.K.

" If we can possibly avoid it, we will. We don’t want to lose any [jobs],” he said. “We try very hard not to, but one’s got to assume somewhere between 5% and 10% of the restaurants might not be able to survive. It’s not just us – I think this applies to everyone out there in our industry."

Of the chain’s 530 U.K. stores, about 370 have reopened since the government eased lockdown measures.

Murdoch further warned that schemes by the U.K. government to financially assist fast food centers and restaurants will not compensate these firms for their fixed costs and lost sales throughout the pandemic.

“I don’t think you can ever get over the top of this problem,” he said.

On Wednesday, the Chancellor of the Exchequer Rishi Sunak unveiled a £30 billion ($38 billion) stimulus plan designed to subsidize wages and protect workers. Sunak also said the government will subsidize 50% of restaurant bills up to £10 ($12.70) per person in August.

Sunak has urged Britons to dine out more in order to save jobs and bring economic activity back to some kind of normalcy.

‘We have to rediscover behaviors that we’ve essentially unlearned over the last few months,” he told Sky News. “But unless activity returns to normal, those jobs are at risk of going which is why we acted in the way that we did.”

Murdoch also highlighted how rent payments were presenting a problem. Burger King has sought to re-negotiate its rents, but without much success.

"Some of these [High Street retailers] -- they're not coming back," he warned.

Murdoch added he wanted the government to help on the rent matter.

In April, Murdoch said Burger King may not be able to pay its rent for some time and was one of many restaurant chains that asked the government for a nine-month rent holiday.

"It looks very difficult for us to be saying that we're actually going to be paying next month's or even next quarter's rent, because we have no sales,” he said back then. "And I think that's the same for a lot of people in the industry. I think the landlords are perfectly sympathetic, but there are also evidently ones who are reasonably threatening when they come back to us as well."

Kate Nicholls, chief executive of UKHospitality, a hospitality trade association, said at the time: "Rents are a major issue for hospitality businesses -- arguably the biggest threat at a time when most have no revenue. We need to come up with a solution to this collectively, to ensure that hospitality businesses, who have already been battered, don't have to suffer more than their fair share."

On Wednesday, LondonEater.com noted that the government’s recent funding plans provided no extended protection for commercial tenants, including restaurants, from Sunak.

“Rent has been the number one concern for restaurants throughout the crisis; despite the government’s lease forfeiture moratorium, which prevents landlords from evicting restaurants, [but] its non-interventionist approach has long left restaurants at the mercy of landlords,” LondonEater wrote.