Britain’s iconic fish and chip shops are facing renewed financial pressure as rising oil prices linked to escalating tensions in the Middle East threaten to drive up operating costs across the sector.

Industry experts warn that the conflict involving Donald Trump, Iran and regional powers could have a direct impact on small food businesses across the UK, particularly energy-intensive takeaways such as traditional chippies.

The warning comes as global oil markets have grown increasingly volatile amid fears that the conflict could disrupt shipping routes through the Strait of Hormuz, a key corridor through which around a fifth of the world’s oil and gas supplies pass.

Any sustained increase in crude oil prices tends to ripple through the economy, affecting transport costs, energy bills and supply chains, all of which are critical to the day-to-day operations of independent food retailers.

Molly Monks, insolvency specialist at Parker Walsh, said small hospitality businesses often feel the effects of global economic shocks faster than larger corporate chains.

“Fish and chip shops typically operate on relatively tight margins, so even modest increases in fuel, oil or electricity costs can quickly start to bite,” she said.

One of the biggest vulnerabilities for fish and chip shops is their heavy reliance on energy. Fryers must operate continuously at high temperatures throughout trading hours, consuming significant amounts of gas or electricity.

Commercial frying requires oil to remain at consistently high temperatures for long periods, making energy costs a major part of daily overheads for takeaway businesses.

“Frying food commercially requires constant heat,” Monks explained. “That means businesses are directly exposed when energy prices begin to rise.”

This exposure makes fish and chip shops particularly sensitive to wider shifts in global energy markets. If oil prices remain elevated for an extended period, energy suppliers often pass higher wholesale costs through to businesses in the form of increased tariffs.

In recent years, energy costs have already been one of the biggest challenges for the hospitality sector following the spike in gas prices triggered by geopolitical tensions and supply disruptions.

Beyond energy costs, rising oil prices also affect the cost of transporting ingredients and supplies, another major expense for takeaway operators.

Fish, potatoes, cooking oil, packaging materials and other essential goods are transported across the country via road freight. As diesel and petrol prices climb, suppliers typically increase delivery charges to compensate.

“If fuel becomes more expensive, it costs more to move fish, potatoes and supplies across the country,” Monks said.

For independent takeaway owners, the result is often a compound effect where several key costs increase at once.

“It’s rarely just one bill increasing,” she added. “Higher energy prices can also push up refrigeration, packaging and supplier costs.”

Refrigeration systems used to store fresh fish and other ingredients are particularly energy intensive, meaning electricity price rises can quickly add to operational pressure.

Many fish and chip shops operate as small independent businesses rather than part of large chains. While that independence often gives them flexibility, it also means they typically have fewer financial reserves to absorb sudden cost increases.

Monks said that larger restaurant groups are generally better positioned to weather volatility.

“Bigger chains may have longer-term supplier contracts or more financial protection,” she said. “But small independent businesses often have to respond quickly when costs start rising.”

Unlike larger hospitality operators, many independent takeaway owners purchase ingredients and energy at market rates rather than under fixed long-term agreements. This means price increases can hit almost immediately.

The UK’s fish and chip industry has already faced several challenging years, including rising ingredient costs, labour shortages and higher energy bills following the pandemic and global supply chain disruptions.

If energy and supply chain costs continue to rise, businesses may have little choice but to pass some of those increases on to customers.

That could mean higher menu prices, smaller portions or fewer promotions as businesses attempt to protect already narrow margins.

“If costs continue to climb, businesses may have to increase menu prices or reduce portions,” Monks warned.

However, raising prices carries risks for small hospitality businesses, particularly during a cost-of-living squeeze when consumers are already tightening spending on takeaways and dining out.

The challenge for many operators will be balancing higher costs with maintaining customer demand.

The situation highlights how quickly international events can affect everyday businesses on Britain’s high streets.

Energy price spikes caused by geopolitical crises can ripple through supply chains within weeks, placing unexpected strain on small firms.

“International events can filter through to everyday businesses very quickly,” Monks said. “For firms already operating on narrow margins, even small cost increases can make a big difference.”

If tensions in the Middle East continue to escalate or shipping routes remain disrupted, analysts warn that oil and gas prices could stay elevated for months, potentially prolonging the pressure on hospitality businesses across the UK.

For fish and chip shop owners, the concern is that another global energy shock could arrive just as the sector was beginning to recover from previous crises.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.

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Admiral staff, which include more than 7,000 in South Wales, will receive £1,800 of free shares on the strong trading performance in 2025

Car insurance to loans group and Wales’ only FTSE business, Admiral, has reported a 16% surge in pre-tax profit to £957.9m. The record performance sees 13,000 staff being rewarded with £1,800 worth of free shares under the group’s employee share scheme.

The Cardiff headquartered business employs more than 7,000 in South Wales.

For its 2025 financial year group turnover came in at £5.9bn, down 1% on 2024. While it said the UK car insurance market remained softer than expected a strong focus drove what it described as “excellent results” in its core business, with profits exceeding £1bn for the first time. Its car insurance business in Europe performed well with strong growth and profitability in France and what it described as a rapid recovery in Italy. Admiral, whose other lines includes pet and home insurance, also operates in Spain.

Admiral Money saw a 24% rise in its gross loan balances to £1.46bn, while contributing £26m to overall group profit – double the amount in 2024 Over 13,000 employees will each receive free share awards worth up to £1,800 under the employee share schemes based on the full year 2025 results.

READ MORE: Admiral invests in fund backing growth of UK mid-market firmsREAD MORE: Admiral acquires commercial fleet insurer fintech Flock in an £80m deal

Admiral chief executive Milena Mondini de Focatiis, “2025 was an exceptional year for Admiral, reflecting the strength of our business model, our discipline and the quality of execution across the Group. We reported record profits, continued to grow our customer base and diversify our business, while maintaining momentum in how we invest and innovate.

“The group reported profit of £958m, up 16 per cent, supported by customer growth of 7%. UK Motor delivered an exceptional performance, surpassing £1bn of profit, while our other UK personal lines, Admiral Money and European Motor operations together generated nearly £100m of profit, with strong results in France and a rapid recovery in Italy.

“Our focus on customers remains central. Investment in our digital journeys, app functionality and product development continue to improve everyday experiences for customers, . This is reflected in consistently strong service outcomes.

“2025 was also a year of purposeful acceleration. We completed the integration of More Than, continued to enhance our product range and increased our investment in technology, data and artificial intelligence. We have established a GenAI Centre of Excellence to move from experimentation to scale, with early pilots showing encouraging signs of improved efficiency and enhanced customer outcomes.”

The results discount the impact of its US car insurance business, Elephant. Its acquisition by US private equity firm JC Flower was finalised last month. As part of its growth strategy Admiral last month acquired London-based digital fleet insurer Flock in a £80m deal

On the outlook the chief executive said: “As we refresh our strategy, our focus is on compounding Admiral’s strengths in data, technology, diversified products and operational excellence to drive greater efficiency, stronger customer retention and long‑term value creation, particularly through multi‑product relationships. Our strong financial position also provides flexibility to continue investing in the business and support future shareholder returns.

“At the start of 2026, we announced that Geraint Jones will retire as Group chief finance officer this summer. Geraint has made an outstanding contribution to Admiral and played a central role in shaping Admiral’s performance and culture. I am pleased he will continue to support the group in a part-time role, and I look forward to working with Rachel Lewis, who will become group CFO on July 1, bringing deep business knowledge, leadership and a proven track-record of delivery.

“Admiral enters the next phase of its strategy in a position of strength. Our culture, people and disciplined approach remain central to everything that we do and I would like to thank our colleagues across the Group for their continued commitment to our customers and to each other.”