A Budget everyone saw coming
By the time Rachel Reeves stepped up to deliver the Budget, half the key details had already leaked online. Only the UK could turn a national financial statement into a running spoiler thread. But once the noise settled, I wanted to understand what the Budget actually means for operators on the ground, not in the commentary bubbles.
To get that reality check, I sat down with Oliver Clarke, Managing Director of the Baa Bar Group. His view wasn’t political. It wasn’t emotional. It was practical. And that alone felt refreshing.
A year of standing still, not moving backwards
Ollie said he came out of this autumn’s announcement feeling more positive than the one in 2024 and earlier in the year. That doesn’t mean he thought it was packed with good news. It simply wasn’t the flattening hits that hospitality has been taking. Last year felt like wave after wave of additional pressure. This year felt more like standing still. In this climate, standing still can feel like progress.
He pointed to business rates relief as the one area that genuinely helps, especially for their smaller sites. It frees up money they can actually use. Not transformation money. Breathing room money. But as a group that has been trading for 35 years, he also noticed something missing. The Budget talked a lot about encouraging startups and new business creation. What it didn’t do was offer meaningful support for the operators who have weathered storm after storm and still want to invest and grow. Hospitality’s backbone isn’t new openings. It is the long-standing businesses still doing everything they can to adapt.
Rising costs and rising expectations
Then we got into costs. Alcohol duty is going up again. For a wet-led group like Baa Bar, this lands instantly. Suppliers already raised prices last year, eating up the much-publicised one penny per pint saving that operators never really felt. With another duty rise coming, cost increases will run through the chain again. And once they land on the operator, they blend into a long list of things that now sit behind the price of a drink.
A drink isn’t just a drink anymore. Guests expect a night out that feels memorable. Lighting. Sound. DJs. Door teams. Better trained staff. The social experience matters as much as the product in the glass. That expectation has grown dramatically in five years. The problem is that experience is the first thing small venues can no longer afford. If you can’t put on the music, upgrade the kit or hire the extra team, you fall behind. Not because you do anything wrong, but because expectations have moved and you have been priced out of keeping up.
VAT, energy and the pressure points operators can’t escape
The VAT situation adds another layer. Hospitality still carries the full 20 percent rate, and the potential for local tourist levies in the future adds uncertainty. As Ollie put it, VAT sits inside the GP. It eats into margin before you even start. The temporary VAT relief during COVID gave operators a genuine chance to breathe. The return to 20 percent felt like the pressure going straight back on the chest.
Energy came up next, and if you think the crisis is behind us, it isn’t for anyone stuck on fixed contracts from the peak. One of their largest sites went from sixty thousand pounds a year in electricity to two hundred and twenty thousand. That is not a bad month. That is a structural shift. And it happened at the same time as wage rises, National Insurance changes and business rate increases. Their April alone saw half a million pounds drop off the bottom line. Costs that were previously controllable suddenly became uncontrollable.
How guest behaviour is changing the game
Against all of that, I asked Ollie how you protect the guest experience without cutting corners. His answer was simple. You cannot cut it. If you cut it, you lose the very reason people go out. Staff happiness, atmosphere, genuine human connection and a sense of occasion matter more than ever. And guests notice. You can tell the moment you walk into a place where the team feel beaten down by cost pressure. You can see it in their energy. You can feel it in the room.
What was interesting is how guest behaviour is evolving. People are going out less often, but when they do, they spend more. The midweek casual drink has almost vanished. Instead, people are building their whole budget into one or two bigger nights out each month. They want it to feel special. They want somewhere that photographs well. Somewhere with a point of view and a personality. Value has shifted from cheapest price to highest return on experience. A steak at Hawksmoor feels like value if it is the best steak you have had. A cheaper meal somewhere forgettable does not.
This shift is changing how operators use data. Baa Bar now treat data as a core part of the guest journey. WiFi, tickets, bookings, CRM. They recently moved to SevenRooms to build proper guest profiles. It means staff can welcome regulars in a way that feels personal, not scripted. It makes people feel seen. And in a world where visits are less frequent, that feeling matters.
What brands must do differently now
This is exactly where hospitality brands need to pay attention. In a tighter market, operators are stripping back their ranges, focusing on fewer products and driving more volume through those choices. Brands used to be far more generous with listings, retropayments and incentives. Those days are gone. If you want to be on the bar now, you need to bring value, simplicity and alignment.
And if you want your in-venue activity to work, you cannot make life harder for the bar team. If an activation takes thirty minutes to brief and interrupts service, it will be ignored. That is where Trunk’s approach of Consult, Craft and Connect becomes essential. Consult means understanding real guest behaviour and the pressures operators face. Craft means building experiences that are simple to run, engaging to guests and actually improve the night out rather than adding clutter. Connect means proving that the activity drove sales, visits or loyalty, so operators and brands can justify doing it again.
There is still opportunity here. There is still room for brands and operators to win, even in a squeezed environment. But it requires partnership, not push. The brands that show up with experiences that genuinely help venues create better nights, and with tools that make things easier rather than harder, will be the ones that stay front of mind.
I asked Ollie at the end what he would think if he were a drinks brand watching this Budget. His answer was that it comes down to volume. To being present in the right places and working with venues in a way that actually supports them. I agree, but I would add a final point. Visibility is not enough anymore. You have to be useful. Useful to the teams running the bars. Useful to the guests trying to have a better night out. Useful to the operators planning their next year in an uncertain landscape.
The Budget may not have handed hospitality the relief it hoped for. But the venues that invest in experience, and the brands that act like partners rather than suppliers, will still find plenty of room to grow.
