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UK retailers face rising electricity costs in 2026

Oct 12, 2026 United Kingdom

UK retailers are set to face a 16% rise in electricity costs in 2026, despite energy consumption remaining virtually unchanged, according to the British Retail Consortium (BRC)

The trade body estimates that retailers’ electricity costs will increase from 2.72 billion in 2025 to 3.16 billion British pounds (3.21 to 3.73 billion euros) in 2026, a rise of around 16%.

Much of the increase can be attributed to non-commodity charges, which cover costs beyond the electricity itself. These include network charges and government policy levies. These charges now typically account for around two-thirds of retailers’ electricity bills. Transmission network charges alone are expected to rise by 72%, which will add almost 200 million (236 million euros) to retailers’ costs.

The increase comes at a time when retailers are facing other financial pressures, including higher employment costs. According to the organistion, businesses have incurred an additional 6.5 billion British pounds (7.7 billion euros) in employment costs over the past two years, partly due to rises in National Insurance contributions for employers and the National Living Wage.

The BRC has warned that rising operating costs could make it more difficult for retailers to keep prices down. While businesses have absorbed some of these increases to limit their impact on customers, further cost pressure could eventually be reflected in shop prices. The organisation is therefore urging the government to take action to curb rising electricity costs for retailers.

“With another £440 million (472 million euros) 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”, said Helen Dickinson, Chief Executive of the British Retail Consortium.

She concluded: “Doing so would ease pressure on retailers, giving them breathing space to invest in keeping prices down for households and keeping people in jobs”.

1 GBP = 1.18 EUR

Image Credits: property.networkrail.co.uk

United Kingdom Economy Organisations Retail