Today's budget will shape the economics of UK QSR, coffee, retail and convenience chains for the rest of the decade. It raises the overall tax burden, reshapes business rates in favour of physical stores, pushes up wages, and quietly taxes sugar and high earners rather than changing headline business tax rates.  

Changes in one view

For medium to large chains, the Budget does three big things:

• Increases labour and payroll costs over the next 1 to 3 years, through higher minimum wages and previous National Insurance changes that are not being reversed.  
• Reduces some fixed property costs for bricks and mortar retail, hospitality and leisure through permanently lower business rates, but with caps and carve outs that matter a lot for large networks.  
• Changes category economics with a new “milkshake tax”, plus wider sugar levy changes, while consumer spend is squeezed by stealth taxes on income and savings, offset partly by support for lower income households and cheaper energy bills.  

The message for operators is blunt: you are not being targeted directly in corporation tax, but you are operating in a structurally higher tax, higher wage environment where margin will live or die in your operations.

This is exactly the environment systems like Orderly were built for.

1. Labour and payroll: higher wage floor, higher payroll drag

National minimum wage and living wage rises

From April 2026:

• The national living wage rises to £12.71 an hour for workers aged 21 and over.
• The minimum wage for 18 to 20 year olds rises to £10.85.  

For QSR, coffee, convenience and high street retail, where a large proportion of your workforce sits in these bands, this is a direct uplift in store P&Ls.

If you are paying at or near the statutory levels today, you are staring at a mandatory wage bill increase of around 4 percent by April 2026, on top of any market-driven pay rises you may need to stay competitive in tight labour markets.  

Employer National Insurance: no let up

The pain from last year’s decision to increase employer National Insurance to 15 percent from April 2025 and to lower the threshold to £5,000 is still coming, and this Budget does not reverse it.  

For labour heavy sectors like hospitality and retail, trade bodies have already warned that this is “one of the most regressive tax changes ever”, dragging hundreds of thousands of workers into full NIC liability and putting direct pressure on jobs.  

Put simply:

• Every extra pound of wage you pay above £5,000 per employee carries a higher NIC rate than before.
• Rising wage floors amplify that effect.

Tax threshold freezes: pressure from your team

Budget 2025 freezes income tax and National Insurance thresholds for another three years from 2028.  

This is a stealth tax on your staff’s take home pay. As wages creep up with inflation and statutory rises, more employees will drift into higher tax bands without headline rate rises.

Operationally, expect:

• More pressure from managers and supervisors for pay rises to compensate for higher effective tax.
• Increased use of staff discounts, benefits and flexible perks as people look for value outside pure salary.

For multi brand employers, you will feel this in wage negotiations across restaurant, coffee, convenience and retail estates.

2. Property costs: permanent business rates changes and who wins

Budget 2025 confirms a major structural shift in business rates for retail, hospitality and leisure:

• Permanently lower business rates for around 750,000 retail, hospitality and leisure properties from 2026 onwards, funded by higher rates on large warehouse properties worth more than £500,000.
• A £4.3 billion support package to cushion properties facing big bill increases as the 2026 revaluation lands.  

This sits on top of the existing 40 percent relief for qualifying retail, hospitality and leisure sites in 2025 to 2026, capped at £110,000 per business.  

For medium to large chains this means:

• Single site and small multi site operators with modest rateable values stand to benefit meaningfully from lower ongoing rates.
• Larger branded groups with high value flagship locations will use up the relief cap very quickly and then face closer to full bills on their biggest sites.
• If you rely heavily on large regional distribution centres and big box warehousing, you may see those assets taxed more heavily to fund the retail high street relief.  

Net effect: the Budget nudges the tax system a little more in favour of physical high street stores over big logistics boxes and online pure plays.

But rates are still material. Without tight forecasting and store level profitability tracking, it is very easy to keep marginal sites open that no longer earn their keep once full rates phase back in.

3. Product and category economics: the “milkshake tax”

The sugar levy is being extended:

• Dairy based drinks such as milkshakes and canned lattes are brought into scope.
• The sugar threshold at which the levy applies falls from 5g to 4.5g per 100ml.  

For QSR, coffee and convenience operators, that matters because:

• Bottled milkshakes, canned coffee drinks and many flavoured dairy or plant based beverages in your chillers may now attract the levy.
• Reformulating to get below 4.5g per 100ml will require product development and may change taste profiles.
• Passing the cost through in price risks yet another visible increase on already sensitive categories.

If you run a brand with a strong milkshake, frappe or RTD coffee franchise, you need a plan for:

• Product reformulation or tiering (standard vs low sugar ranges).
• Clearer menu engineering to protect margin by bundling or upselling.
• Real time sales and margin tracking by SKU and format so you can see if levy induced price changes are distorting mix.

4. Logistics, supply chain and input costs

There are a few background shifts worth noting.

Fuel duty freeze

Fuel duty remains frozen until September 2026, with the long standing 5p per litre cut also held.  

For chains operating their own fleets or relying on distributors, this:

• Provides short term predictability in transport costs.
• Delays the inevitable step up in fuel duty, now likely from 2027 when rates begin to rise with inflation.

If you are planning fleet contracts, route optimisation projects, or switching to EV logistics, you now have a clearer tax horizon.

Energy bills and green levies

Household energy bills will fall by around £150 a year on average as costs from the Energy Company Obligation and most of the Renewables Obligation are shifted into general taxation.  

Two knock ons for your business:

• Consumers get a little more breathing room on bills, which may support spend on affordable treats and grab and go food.
• The underlying green support is now funded from broader tax, which reinforces the wider point: energy and carbon costs remain politically live.

Even though there is no direct new commercial energy relief here, operators will stay under pressure to improve energy efficiency and reduce waste.

Customs duty and online competition

Customs duty will apply to parcels of any value, closing the low value import loophole that online retailers have used to undercut high street operators with cheap imported goods beneath past thresholds.  

For convenience and retail chains, this slightly improves the competitive footing of physical stores selling FMCG categories against cross border online discounters.

5. Demand and customer spend: who feels squeezed, who gets help

Overall, Budget 2025 raises around £26 billion in extra taxes by 2029 to 2030 and pushes the tax burden to historic highs as a share of GDP.  

Key demand side points:

• The freeze on income tax and National Insurance thresholds until 2030 to 2031 is the single biggest tax rise in the package and hits “ordinary” earners as they drift into higher bands.  
• Extra taxes on savings, dividends and property income target higher earners and landlords.  
• Removing the two child benefit cap and expanding support for lower income households will lift incomes for a significant group of families.  
• Cheaper household energy bills take some pressure off weekly budgets, as described above.  

What this means at your tills:

• The “squeezed middle” of younger professionals and families will feel poorer in real terms because of stealth taxes and higher mortgage or rent costs.
• Lower income families, particularly those with more than two children, may have slightly more to spend on small out of home treats.
• Older, wealthier asset owners face higher property and investment taxes but are less important to core QSR and convenience volumes.

Expect continued trading down, increased price sensitivity and greater volatility between pay days. Value menus, refillable coffee subscriptions and targeted promotions will still matter more than headline full price ranges.

6. Sector by sector: what it means in practice

QSR brands

For burger, chicken, pizza and fast casual chains:

• Wage and NIC increases hit hardest given high labour intensity and long opening hours.
• The milkshake tax and broader sugar levy tightening threaten margins on shakes, desserts and some fountain products, depending on formulations.  
• Permanent business rates relief is helpful for small to mid footprint units but will be capped out quickly for large networks and prime flagship locations.

Strategic implications:

• You will need cleaner labour standards per transaction, tighter rota planning and automation of low value tasks.
• Forecasting and prep must be precise enough to reduce waste without increasing stockouts.
• Category management for drinks and desserts becomes more complex as fiscal policy and health trends pull in the same direction.

Coffee chains

For multi site coffee operators:

• Wage and NIC effects mirror QSR. City centre and travel hub operations will also feel any wider economic slowdown fastest.
• Sugar levy expansion directly homes in on branded sweet drinks, RTD lattes and bottled cold coffee.
• Business rates changes will help smaller high street stores, but city centre flagships with high rateable values still face chunky bills.

Strategic implications:

• Stronger push on unsweetened, low sugar and plant based lines.
• More importance on dwell time, loyalty and subscription models to spread fixed occupancy and labour costs.
• Need for better control of bakery and fresh food waste, which is often the silent P&L killer in coffee.

Convenience and grocery retail

For symbol groups, petrol forecourt convenience and supermarket chains:

• Business rates reform is relatively good news for standard convenience boxes, less so if you are also the owner of large warehouses that may see higher multipliers.  
• Customs duty on all parcels reinforces the case for local convenience as a competitive alternative to “cheap online” imports.  
• Sugar levy changes extend into impulse chillers and soft drink bays.

Strategic implications:

• Fine tuning range, facing and local assortment gets even more valuable as every linear metre has to work harder.
• Fresh and short life categories will need stronger predictive ordering to avoid waste as households juggle cost of living pressures.  

7. The common thread: execution will decide who keeps their margin

Across all four formats, the pattern is clear:

• Tax policy is nudging the system toward higher labour costs and cleaner, less sugary product portfolios.
• Business rates reform gives physical stores a modest boost, but not enough to offset sloppy operations.
• Consumer spend growth will be muted, with stronger performance only where brands deliver consistent value and availability.

In that world, you cannot rely on macro tailwinds. Margin will depend on:

• How precisely you match stock to demand at each site.
• How consistently your teams execute tasks and routines.
• How well you use data to spot friction, waste and missed sales.

This is where Orderly comes in.

8. How this Budget connects to Orderly’s mission

Orderly is a certified B Corp that has spent more than 17 years building a platform for smarter store and supply chain operations for some of the world’s largest restaurant and convenience chains.  

The Budget has made three things non negotiable for brand owners:

1. You need to run leaner without breaking service.
2. You need to measure waste and labour precisely, site by site.
3. You need to prove that your operations are sustainable and well controlled.

Orderly is built exactly around those needs.

Predictive ordering and stock management

Orderly’s platform connects sales, store behaviour and external signals like local events, weather and demographics to forecast demand and recommend orders at SKU level.  

That matters directly in the post Budget world:

• Rising wages and NICs mean every extra hour of unnecessary prep or counting is more expensive.
• Business rates relief caps and mixed site economics mean you cannot carry “insurance stock” in marginal sites.
• Sugar levy changes mean you need tight control of high sugar SKUs to avoid write offs as mix shifts.

Customers using Orderly report double digit reductions in food waste and significant improvements in profit per site, backed by real case studies.  

Digital assistant and real time operations

Orderly’s digital assistant uses data, CCTV and sensors as a “truth layer” to guide teams through tasks in real time, from prep and waste capture to compliance checks.  

In a high tax, high wage environment, this helps you:

• Remove manual, low value tasks that burn paid minutes without changing the outcome.
• Standardise critical store routines so you cut process variance that forecasts alone cannot fix.  
• Capture accurate, time stamped data on waste, checks and production so you can show auditors, franchisees and investors that controls are in place.

Orderly’s own customers talk about saving over 5 hours of admin per week per store and seeing much tighter control of margins across networks of over 100 sites.  

Head office and field: one operational view

For franchisors and brand owners, one of the Budget side effects will be renewed questions from boards and investors:

• “Which sites will remain profitable once wage rises and rates changes land”
• “What does the milkshake tax do to our category mix in the next 12 to 24 months”
• “Where should we invest capital to benefit from the new investment allowances”  

Orderly gives head office and field teams:

• A single platform to see stock, sales, task compliance and waste trends across thousands of locations.  
• API access and exports so your finance and data teams can plug operational reality directly into planning models.  

This is exactly what you need to respond rationally to Budget 2025, rather than guessing.

9. What you should do next as a brand or franchise owner

If you are running a medium or large QSR, coffee, convenience or retail chain, the practical play from this Budget looks like:

1. Quantify the impact.
   • Model wage and NIC rises at role and site level through 2026.
   • Layer in known business rates changes and relief caps.
   • Identify the top 20 sites where the Budget shifts you closest to break even.
2. Re engineer labour and waste.
   • Use systems like Orderly to baseline labour hours, task load and waste by category and daypart.  
   • Target micro frictions in ordering, prep and waste capture that quietly burn hundreds of thousands of pounds a year across networks.
3. Redesign your product and pricing mix for the sugar levy.
   • Map all milk based and high sugar RTD lines against the new thresholds.
   • Use demand data to decide where to reformulate, where to premiumise, and where to exit SKUs altogether.
4. Make business rates reform work for you.
   • Use store level profitability and footfall data to decide where to double down and where to consider exit or reformat as the 2026 list beds in.  
5. Invest in systems while the allowances are generous.
   • The new 40 percent investment allowance makes it easier to justify spend on automation, digital task management, cameras and sensors that drive long term productivity.  

10. Where Orderly can help

Orderly already powers predictive ordering, stock management and real time ops for global restaurant, coffee and convenience brands.  

In the context of Budget 2025, that translates into very specific help:

• Protecting margin under higher wage and NIC costs
  • Better forecasting and replenishment so you hit high availability with less overtime and fewer emergency deliveries.  
• Reducing waste as sugar levies and demand patterns shift
  • Waste tracking by SKU, location and time so you can act before problems become patterns.  
• Making business rates and investment decisions with real data, not anecdotes
  • Clean visibility of how each site actually performs once labour, waste and stock loss are taken into account.
• Keeping your B Corp and sustainability story real
  • Demonstrable reductions in overproduction, spoilage and unnecessary labour, with clear metrics you can share with stakeholders.  

If you are looking at Budget 2025 and wondering how to keep profit and purpose aligned across a growing network of sites, this is the right moment to get serious about operational data and automation.

Orderly was built for exactly this kind of environment.

You can find out more at orderly.io or speak to the team about how predictive ordering and the digital assistant could support your estate over the next phase of tax and cost change.