The other thing that happens in a lot of these businesses is that instead of employing people who already live here and have a right to work here, they bring yet more people from their home country. Part of the deal is that these people will rent a space in a shared staff house from their employer. So while some of them may, on paper at least, appear legitimate and be paid mimimum wage for HMRC purposes, the employer will then claw back a big chunk of what they pay them by charging an unreasonable amount for accommodation, and probably some sort of arrangement fee for bringing them over in the first place.
So in effect, the employee who has been brought over from Vietnam or Bangladesh or wherever, thinks ending up with £5 an hour and sleeping on a mattress on the floor in a shared room is perfectly fine, because all their basic needs are taken care of, and at home they'd only be earning £2 an hour before bills and sleeping on a mattress on the floor anyway. So that extra £3 per hour goes quite a long way once it's remitted back home every month.
If these people had to employ from the general populace and couldn't pull all these stunts to save money, the 'legitimate' side of their business model wouldn't work at all.
It's the same reason so many curry houses will bring chefs from Bangladesh and put them up in a box room over the top of the shop. instead of training and employing one of the many, many young men of Bangladeshi heritage who were born here.