Till to table: The Retail & Hospitality rundown

Iran conflict and oil supply disruption: Risks for retail and hospitality businesses (Update 18 March 2026)

Following the conflict in Iran, vessel traffic through the Strait of Hormuz, a critical passageway for international oil and gas transportation, has effectively halted, triggering a global oil crisis. As a result, barrel prices have soared, with Brent Crude oil now trading at around $105-110 per barrel, an increase of over 50% over the course of a month.

This sharp new energy shock is already impacting the UK economy across multiple sectors: GDP growth has stagnated, inflation, previously projected to decline, is now expected to remain elevated as energy and fuel costs rise. Additionally, the Bank of England is anticipated to maintain current interest rates amid concerns that escalating oil prices will further raise the cost of living.

How will this impact retail and hospitality businesses?

Heightened operating costs

• Energy bills may remain elevated for longer.
• Retail supply chains will see stock availability and working capital disrupted as a direct result of vessels forced to reroute.
• Transport and delivery will become more expensive as fuel costs rise, feeding through into supplier delivery charges and surcharges.

Rising input and food prices

• Rising energy and fertiliser expenses will drive up farming and manufacturing costs, which will then be reflected in wholesale prices for essential food and grocery items.
• Retailers and venues will face more volatility in availability and pricing, especially on fresh and imported products.

Pressure on margins and viability

• Many operators may have to choose between raising prices, shrinking portions, or cutting promotions to protect margins.
• Lower household disposable income will likely reduce retail and hospitality spending and revenue.

Tougher trading and investment decisions

• With inflation risks heightened and rate cuts delayed, debt costs will stay higher for longer and demand remains fragile.
• Businesses may become more cautious about refurbishments, new sites and any major investments, and choose to refocus on efficiency, energy saving and cost control.

What can businesses do for now?

While businesses can’t control global events or markets, they can take clear, practical steps to understand exposure and protect margins. Below are some immediate actions retail and hospitality businesses can take now, to build resilience rather than simply reacting to the next headline.

• Get a clear picture: Create a list of energy contracts by site, including tariff, end date, fixed vs variable. Identify which supplier contracts include fuel and delivery surcharges and how often they’re reviewed.
• Stress-test your numbers: Run some “what if” scenarios on higher energy and input costs to see which sites, formats or categories are most exposed.
• Talk to suppliers now: Open early conversations about pricing, surcharges and delivery patterns so you have options rather than ultimatums.
• Cut obvious waste first: Agree on some quick and logical energy-saving steps and give managers a small number of KPIs to track.
• Focus on profitable lines: Review pricing, menus and ranges with an accountant to prioritise stronger-margin items and remove persistent under-performers.
• Bring in specialist support: Ask your accountants or advisers to review your numbers and plans with you, turn them into an action plan, and support key discussions with suppliers, landlords or lenders.

Commenting on the situation, Emma Benjamin, Hospitality Partner, stated,

“The current oil shock will affect the retail and hospitality sectors more quickly than other crises, by raising costs for energy, food, and logistics, while also limiting how much consumers are able to spend. Businesses face a major risk not just from rising costs, but also from ongoing instability that squeezes profit margins and complicates pricing, cash flow, and demand predictions. Most retail and hospitality companies will ultimately have to decide whether to push prices up or to absorb the extra costs.”

Emma Benjamin, Hospitality Partner