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British restaurant chains are looking to the U.S. for expansion as the Labour Party prepares to introduce higher taxes in the UK.
Upmarket eateries such as The Ivy and Indian restaurant Dishoom are planning to establish a presence in America, while Pizza Express is making another attempt at the U.S. market, starting with Florida this year.
They follow the footsteps of other British chains, including Hawksmoor, Pret A Manger, and Wagamama, all of which have already opened locations in New York.
This shift comes as operating costs for UK restaurants continue to rise. Starting next week, employers will face higher National Insurance (NI) contributions, while a 6.7% increase in the minimum wage will add further financial strain. Additionally, small restaurants will see reductions in business rates relief. Hospitality leaders argue that these tax changes will disproportionately impact their industry.
Greg Johnson, a leisure industry analyst at Shore Capital, noted that the rising tax burden has shifted the balance, prompting successful restaurant groups to invest in the U.S. instead of the UK.
“Investing in the UK is increasingly risky under this government,” he said.
Kurt Zdesar, founder of Japanese-Peruvian restaurant chain Chotto Matte, highlighted the difference in earning potential between the two countries.
“In the UK, people no longer have disposable income due to the rising cost of living and wages not keeping up with inflation,” he said. “Meanwhile, the service industry in America is thriving—my waiters can earn between $150,000 (£115,879) and $200,000 a year because of the service charge.”
Chotto Matte currently operates locations in Miami and San Francisco, alongside its branches in London, Manchester, and the Middle East.
Pizza Express is attempting a U.S. expansion after a failed attempt in 2000. Ben Lawrence, head of franchise growth, stated:
“If Florida proves successful, it will be a strong demonstration of our potential in the U.S. I can’t think of any state where we wouldn’t consider expanding.”
Other British restaurant groups currently launching or growing their U.S. presence include Big Mamma Group, which owns a collection of high-end Italian restaurants in London, and JKS, the parent company of two-Michelin-starred Gymkhana.
While entering the U.S. market can be expensive and complex, it offers significant financial rewards.
“In America, there’s a lot of red tape and many hoops to jump through,” Zdesar said. “But once you overcome those challenges, the potential profits are huge. Top restaurants in prime locations can generate between $20 million and $50 million a year—something unheard of in the UK.”
Zdesar also noted that business conditions vary across different U.S. states.
“My advice is to avoid blue states and focus on red states because they are more business-friendly. Texas and Dallas, for instance, not only thrive but also offer much better profit margins.”
A senior restaurant industry source added:
“If you get it right, the revenue potential in the U.S. is extraordinary.”
