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What does a slice of pizza really cost a small hospitality business? How about a bao bun, a chicken sando or a bowl of cacio e pepe? This Thursday, visitors to Seven Dials Market in Covent Garden got a rare glimpse behind the scenes of the industry’s finances, as traders dropped their prices to the bare minimum they actually take home once tax, VAT and operating costs are stripped away.

For one hour only, selected traders served their signature dishes at startlingly low prices: New York-style pizza for 71p, bao for £1, cacio e pepe for £1.44 and chicken sandos for £2.40. These aren’t promotional gimmicks or loss-leaders – they represent the true margin businesses keep after everything else has been paid.

The initiative, developed by digital magazine London on the Inside with market hall operator KERB, lands just days before the government’s budget on 26 November. Its purpose is to draw attention to the escalating pressures facing hospitality, including rising business rates, national insurance contributions and minimum wages, and to highlight why so many operators are calling for urgent reform. Many traders taking part say they hope the hour-long event will help diners understand what it takes to keep a food business afloat in 2025.

Alice from Mezzo Pasta is one of them: “Since we joined Seven Dials Market and the volume of our business increased quite dramatically, firstly we went past the threshold for VAT registration and then we felt the pressure of the everyday expenses that happen when you scale your business. Before we were essentially a one-person operation (me) and now we have seven employees. NI contributions and VAT make a big dent in our numbers. We’ve also been affected by Brexit as a lot of our ingredients are imported from Italy. Prices are constantly rising and profit margins are getting thinner and thinner.

“When KERB approached me and asked if I wanted to take part in this campaign I thought it was a really good thing. I feel like most people not involved in hospitality don’t really have any idea of what’s going on behind the scenes and they just see the rising prices. It’s great to get this message out to people because when they see stats on the TV it’s easy to brush it off and forget.”

Lucky’s Hot Chicken echoed the sentiment, saying the campaign is a necessary reality check for diners: “We wanted to be part of this campaign because now it’s difficult to be a small business. Some of our customers see our menu and the prices and sometimes complain it’s quite expensive, and we can understand that with the cost of living. But we have rising costs, we have to pay salaries, we have a lot of bills behind the scenes – more than people imagine. We really have a minimum profit and this campaign is a great way to show that.”

Simon Mitchell, CEO of KERB, commented: “Today’s event exposed the brutal reality facing small independent hospitality businesses. After ingredients, wages, overheads and VAT, independents are literally left with pennies - margins that simply aren’t sustainable. Smaller operators don’t have deep pockets or the scale to absorb these costs. Next week’s Budget must deliver meaningful support for independents, starting with a VAT reduction and National Insurance reforms that make it easier to hire young people and those moving from welfare into work.”

Traders taking part included:

• Bad Boy Pizza – Notorious PIG Slice, 71p (RRP £6)

• Arnabeet – Syrian Chicken Wrap, £1.15 (RRP £11.50)

• Yum Bun – Bao & Gyoza Box, £1 (RRP £13.50)

• Mezzo – Rigatoni Cacio e Pepe, £1.44 (RRP £9.50)

• Lucky’s – Fried Chicken Sando, £2.40 (RRP £12)

The event also supports UK Hospitality’s TAXED OUT campaign, which is pushing for three key measures in the November budget: lower business rates, a cut in VAT on hospitality to 10%, and a reduction in National Insurance Contributions to help safeguard jobs and encourage hiring.

If you want to support the campaign, you can add your name to the Save Hospitality petition.