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Burger King boss says the business could close around 5% of its restaurants

09 July 2020 by

Alasdair Murdoch, chief executive of Burger King UK, has said around 5% of its restaurants "might not be able to survive" the coronavirus crisis.

Speaking on BBC Newcast, Murdoch said: "If you think we operate from almost entirely leasehold businesses, ie, we rent all of our premises and you have very significant costs associated with that, and for one month, two months, three months, four months, five months you're taking absolutely no money, it's very difficult from a cash flow point of view…

"We don't want to lose any, we're trying very hard not to. But one's got to assume that 5%-10% of the restaurants might not be able to survive."

He added: "If we can possibly avoid it we will… It should be our prime responsibility to keep as many people in work as we can. I think we have a responsibility to do that."

Murdoch penned an open letter back in April to major landlords calling on them to work with hospitality businesses to ensure outlets have the best chance of staying open in the face of the coronavirus crisis.

Unfortunately, he said since the government published its code of practice for the commercial property sector, landlords have "hardened their position". He warned: "You're going to see more of those administration-like processes happen because landlords won't negotiate or aren't prepared to negotiate… that will drive more unemployment.

"There will be redundancies, because some of these high streets – they're not coming back."

He also said a lot of sales were still coming through delivery apps such as Deliveroo, Uber Eats and Just Eat, for which businesses have to pay a transaction fee: "You have less sales, and the sales that you have are inherently less profitable."

Murdoch said it was "extremely likely" the business, which has approximately 530 restaurants, around 380 of which have reopened, and 17,000 employees, would take part in the Chancellor's ‘eat out to help out' scheme announced yesterday.

Photo: Shutterstock

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