Retail under pressure: Five practical ways retailers can take back control of energy costs

By, Jon Cranefield, Head of Responsible Consumption at Sustainable Energy First.

Retail has rarely faced a more complex operating environment. Profit warnings have dominated headlines in early 2026, with employment costs rising sharply. According to the latest British Retail Consortium (BRC) Chief Financial Officer Survey, 84% of retail CFOs now rank labour and employment costs among their top three concerns, and nearly seven in ten feel pessimistic about the year ahead.

While utilities did not top the BRC’s concern table, energy remains a critical, and often misunderstood, pressure point – and this has just been brought sharply into focus by the Iran conflict and subsequent impact on energy costs.

The good news is that when margins are tight and other input costs are rising, energy is one of the few areas where meaningful savings can still be achieved without undermining customer experience or brand value.

In today’s market, retailers who treat energy strategically, rather than administratively, will be the ones who improve operational resilience and protect margins.

Here are five areas where retailers can take action within their energy strategy.

1. Rethink procurement: timing and risk appetite matter

Energy procurement is not simply about securing the lowest unit rate on the day a contract expires: Volatility in wholesale markets means that timing, risk appetite and purchasing structure matter. Flexible purchasing strategies, layered buying approaches and risk-managed contracts can help retailers avoid locking into contracts at peak market moments.

For multi-site operators in particular, aggregation strategies and portfolio-level management can deliver better outcomes than fragmented renewals handled store by store.

2. Understand and manage non-commodity costs

For many retailers, policy costs, network charges and levies – also known as non-commodity costs –  now account for a significant portion of total electricity bills. These costs are complex, and often poorly understood internally. Yet in some cases, businesses may be eligible for exemptions, relief schemes or more advantageous charging arrangements depending on their consumption profile.

Even when costs cannot be avoided, they can often be better forecasted, validated and managed. Accurate data and invoice scrutiny can prevent overpayment and improve budgeting certainty.

3. Validate bills and recover revenue

Utility billing errors are more common than people think, particularly across large, multi-site estates with complex metering histories. Revenue recovery and historic utility bill validation can identify discrepancies, previous overpayments or incorrect tariff applications. For retailers operating on tight margins, recovering previously overpaid bills can provide an immediate financial benefit.

If you’re unsure whether past billing errors are costing your business, now’s the time to find out. Get in touch for a free, no-obligation review with Sustainable Energy First’s Revenue Recovery team.

4. Eliminate avoidable energy waste

In retail, energy waste can be widespread and a challenge to manage. Extended trading hours, inconsistent store shutdown procedures, poorly optimised HVAC systems and outdated lighting all add incremental cost. Across a national estate, these costs add up.

Simple interventions can deliver strong returns:

• LED lighting upgrades
• Smarter building management systems
• Improved scheduling of heating and cooling

Energy visibility is crucial because waste remains invisible without granular consumption data. Retailers that invest in monitoring and analytics typically uncover significant quick wins before moving to capital-intensive upgrades.

5. Explore options beyond traditional supply contracts

Energy costs don’t have to be dictated by the wholesale market. For retailers willing to think beyond standard supplier contracts, there are opportunities to take control and lock in stability. This includes onsite generation, corporate power purchase agreements (CPPAs), or joining group-buying initiatives such as Sustainable Energy First’s Sustainable Energy Consortium (SEC).

SEC currently brings together over 100 renewable generation assets and connects them with over 80 businesses to provide half-hourly matched renewable electricity, delivered via a capped-price model that reduces exposure to wholesale energy prices. You can learn more about the Consortium here.

Energy as a lever, not a liability

There are many rising costs that retail businesses cannot control – but they can control how strategically they approach energy.

Energy should no longer be treated as an administrative overhead. As employment costs rise and investment budgets tighten, improving energy procurement and operational efficiency becomes a practical way to defend margins. For advice and support, get in touch.