The energy crisis has affected every part of our lives as individuals, with the cost of living increase crippling households up and down the UK. According to the latest statistics from National Energy Action (NEA), around 4.5 million households in the UK were deemed to be in fuel poverty. In the coming months, this figure is expected to rise to a staggering 8.4 million. It’s not just individuals with households to support that are feeling the effects of the energy crisis however. Businesses witnessing steep rises in the cost of their gas and electricity are being negatively impacted too.
The retail sector in particular has had to bear the burden of inflated energy costs. Unlike consumers, whose energy usage has been capped in recent months, retail businesses and the commercial premises they inhabit have seen profits dwindle in every aspect due to rapidly rising costs.
In this article, we reveal how the energy crisis is affecting the retail sector and the businesses that call it home.
High energy bills
The energy crisis has led to higher energy bills for everyone, including retail businesses. These inflated costs have meant already tight budgets have been squeezed to the limit. This is expected to continue throughout 2023 despite the government stating that the cost of living crisis and associated energy costs are merely temporary.
High energy bills have hit retail businesses particularly hard. With many still recovering from the pandemic and reeling from falling retail sales, and consumers increasingly relying on online only purchases – a buying theme that was only consolidated by Covid-19 – increased energy bills will be a stretch too far for countless retailers with a physical presence on the high street.
The prospect of power cuts is also a major concern for retailers, with the impact widespread power outages could have on business productivity set to leave retail companies significantly out of pocket.
Low staff recruitment
Unbeknown to most, staffing is another area of retail that has been affected by the energy crisis. With less money to invest in the recruitment of new staff and the retention of existing workers, the pool of talent accessible to retailers is getting smaller and smaller.
Rising living costs mean roles that could be filled easily and at minimal cost previously are more difficult to recruit for, as potential candidates look for higher wages to cover the financial shortfalls they are currently experiencing.
Disrupted supply chain
At the other end of the spectrum, the supplies retail businesses need are also becoming more difficult to obtain. With the increasing cost of transportation – triggered by the rising energy costs experienced by suppliers – more money has to be spent by retailers to secure the goods they require.
The lack of supplies is affecting reputations too, with customers all too ready and willing to shop elsewhere if the product they need from one particular retail brand is lacking.
Slower business growth
Business growth is at a standstill due to the energy crisis, with rising inflation making the finance that fuels growth difficult, or even impossible, to access. Retailers need to secure more finance than ever to counter rising business running costs, yet resources remain limited.
For more information and support relating to energy efficiency measures and business energy procurement, it’s well worth seeking help from an expert.
