Urgent action needed as UK retailers’ energy bills push up price of everyday essentials for shoppers
Retailers face a £440 million increase in electricity costs this year, despite their energy use remaining virtually unchanged, according to a new report from the British Retail Consortium (BRC). The trade body says it’s concerned that this will feed directly into consumer prices, raising the cost of living for millions of families.
The report notes that electricity costs are expected to rise from £2.72 billion in 2025 to £3.16 billion in 2026, an increase of 16% in just one year. Much of this rise is being driven by growing non-commodity charges (NCCs), government driven costs added to electricity bills, rather than global energy prices. These charges, which include government levies and rising and volatile network costs, now typically make up around two-thirds of retailers’ electricity bills. Transmission Network Use of System charges alone are expected to rise by 72%, adding almost £200 million to bills.
Retail is one of the UK’s major energy using industries and, following investment in decarbonisation, around 90% of the industry’s energy use now comes from electricity. This leaves retailers particularly exposed to rising electricity costs, with recent volatility in energy prices following conflict in the Middle East adding further pressure.
The increase comes as retailers face a wider squeeze from rising costs. The industry has already been hit by £6.5 billion in additional employment costs over the past two years, including higher employer national insurance contributions, above inflationary increases to the national living wage and other employment related costs.
The BRC argues that retailers have absorbed as much of these additional costs as possible to protect customers. But with margins already extremely tight, the continued rise in electricity and employment costs is making it increasingly difficult to do so without putting further pressure on prices at the till. This is particularly challenging for energy intensive parts of the industry, including food retail, where higher electricity costs risk adding to inflationary pressures at a time when household budgets remain stretched.
Helen Dickinson, Chief Executive at the British Retail Consortium, says: “Retailers’ energy bills continue to push up the price of everyday essentials for shoppers everywhere. With another £440 million increase this year despite their energy use barely changing, the Chancellor must take action to reduce the plethora of policy levies, as well as stabilise the predictability of network charges that are driving up the cost of energy. Doing so would ease pressure on retailers, giving them breathing space to invest in keeping prices down for households and keeping people in jobs.”
2026 RTIH Innovation Awards
UK retail will be a key focus area at the 2026 RTIH Innovation Awards.
The awards, which celebrate global retail technology innovation in a fast moving omnichannel world, have now closed for entries. Our winners will be revealed at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London on Wednesday, 4th November.
Check out our 2026 shortlists and finalists here.
We received a record number of entries this year and many fantastic examples of technology excellence driving transformative change across the global retail sector.
Congratulations to all those who made it through the initial submission process! It’s now over to our star studded judging panel who will decide the winners to be announced at the 2026 RTIH Innovation Awards Ceremony, taking place at The HAC in Central London.
The event will be held on Wednesday, 4th November and consist of a drinks reception, three course meal, awards ceremony presided over by award winning stand-up comedian, presenter, actor and broadcaster, Aurie Styla, and after party until 1am.
Click here to book your place at the 2026 RTIH Innovation Awards Ceremony on Wednesday, 4th November.
