Five Things I'm Watching After Easter (And One I'm Trying Not To Think About)

There's a particular kind of quiet that settles over the hospitality industry in the days before a bank holiday weekend. Operators are heads down, covers are up, and nobody has time to read anything longer than a rota. So I'll save this for Tuesday, when the dust has settled, the egg hunt is a distant memory, and everyone is staring at their Q2 targets wondering what just happened.

Here are five things I'm watching closely going into the second quarter of 2026 — and one I'll admit I'd rather not think about at all.

Five Things I'm Watching After Easter (And One I'm Trying Not To Think About) - Michael Baglieri

1. Labour costs hitting harder than operators expected

Let's be honest about the numbers, because they deserve to be said clearly.

In April 2025, employer National Insurance Contributions rose to 15% and the threshold at which employers start paying was lowered — a double hit that landed hard across multi-site operations. What most operators modelled as a one-off adjustment has now become the new baseline. And as of this week — 1st April 2026 — the National Living Wage has increased again, to £12.71 per hour.

That is not a rounding error. For a hospitality business running 300 or even 600 hours of labour per week, per site, this is a material shift in the cost structure. Annualised across a portfolio, it is the kind of number that changes conversations with investors, banks, and boards.

What I'm watching isn't the cost itself — it's the response. There are broadly two types of operators right now: those who are making structural decisions about how they deploy labour, and those who are quietly trimming hours and hoping nobody notices until the next period closes. The first group will be in a stronger position by Q3. The second group will be having a more difficult conversation before the year is out.

The operators who treat this as a design problem — how do we build a labour model that genuinely works at these rates — will come out ahead. The ones who treat it as a line item to manage will keep having the same conversation every quarter.

2. The delivery margin squeeze reaching a tipping point

I've been saying for a while that the economics of third-party delivery are broken for a significant number of operators. Not all of them — there are businesses for whom the channel genuinely works. But for too many, it's a revenue line that flatters the top of the P&L and quietly destroys the bottom.

Something has to give. Either the commission model changes — and there are early signs that some platforms are starting to feel competitive pressure — or operators start making harder decisions about which channels they actually want to be in. The brands that have built genuine direct relationships with their customers are going to have options. The ones that outsourced that relationship entirely are going to find themselves with very little leverage.

This isn't an argument against delivery. It's an argument for knowing your numbers and making a deliberate choice — rather than being on every platform because it feels like you should be.

3. AI moving from pilot to P&L

The operators who ran AI trials in 2025 are now being asked to show the return. Some of them can. Most of them can't — at least not in a way that satisfies a CFO or a board.

The ones who are struggling tend to share a common characteristic: they deployed AI against the wrong problems. Customer-facing tools, marketing copy, chatbots. Visible, easy to demo, difficult to quantify. The ones who are showing genuine returns built around operational decision-making — labour, waste, throughput, yield. Boring problems with measurable outcomes.

I've written about this before and I'll keep writing about it, because I think it's the most important distinction in the space right now. The question isn't whether AI works in restaurants. It does. The question is whether you've pointed it at a problem that matters to your business model.

4. US brands arriving with high expectations and low local knowledge

This is the one I find genuinely exciting — and the one that makes me a little nervous at the same time.

The scale of American QSR investment coming into the UK in 2026 is significant. To name just a few of the brands either arriving or accelerating:

• Jersey Mike's Subs — planning 400 locations across the UK and Ireland. That is an extraordinarily ambitious target.

• Raising Cane's — making its long-anticipated UK debut this year, bringing its cult following and laser-focused menu with it.

• Chick-fil-A — accelerating its UK expansion following its Leeds opening, with more sites in the pipeline.

• Chuck E. Cheese — also confirmed for a 2026 UK entry, targeting a family dining market that has been underserved for years.

These are serious brands with serious capital behind them. The best American QSR operators know things about throughput, consistency, and unit economics that the UK market is still learning. I have genuine respect for what several of these businesses have built.

But — and this is a significant but — the UK is not America with smaller portions and worse weather. The planning system is different. The labour market is different. Consumer expectations around value, service, and brand authenticity are different. The cultural assumptions that work in Texas or Tennessee don't always translate cleanly to Manchester or Edinburgh.

The brands that invest in genuinely understanding that — before they start signing leases — will do very well here. The ones that treat the UK as a copy-paste of their domestic model will relearn some expensive lessons. I say this with warmth, not scepticism. I've watched it happen enough times on both sides to know it's not a criticism. It's just a pattern.

5. Data becoming the asset nobody has valued yet

This is the one I find most interesting, and the one I'm spending the most time thinking about professionally.

Restaurant groups are sitting on behavioural data — purchasing patterns, visit frequency, menu preferences, daypart distribution, channel behaviour — that has genuine commercial value beyond the four walls of their own operation. Most of them don't know it. Some of them are starting to suspect it. Very few have any kind of framework for how to think about it, let alone monetise it responsibly.

That's changing. Not overnight, and not without some interesting questions around data governance and consumer trust. But the operators who get ahead of this — who start treating their data as an asset on the balance sheet rather than a byproduct of their POS — are going to find themselves in a very different conversation with investors and partners in three to five years.

I'll be writing more about this specifically in the coming weeks. It's where most of my advisory work is heading, and frankly it's the most intellectually interesting problem in the sector right now.

The one I'm trying not to think about this Easter?

Egg pricing. Which? found a Galaxy Extra Large Easter egg went from £4.98 for 252g last year to £5.97 for 210g this year — a 44% increase per gram, achieved by making the product smaller and the packaging identical. In restaurants we call that portion distortion. In confectionery they call it innovation. Whoever handles Cadbury's PR deserves a bonus.

And possibly a Wispa.

Have a good break. Back properly next week.

Michael Baglieri is a restaurant consultant and Managing Director (EMEA) with 20 years of experience across the USA, Europe, GCC, and Asia-Pacific. He writes about restaurant strategy, data, and the future of the operator at michaelbaglieri.co.uk