How rural retailers can navigate rising energy costs

10th November 2025

Rural retailers can navigate rising energy costs by renegotiating contracts, investing in energy efficiency, and leveraging community support schemes. These strategies are essential in 2025, as energy remains one of the biggest threats to retail viability across the UK.

The energy crisis has become a defining challenge for rural retailers, especially in Scotland's Highlands and remote communities.

According to the British Retail Consortium, UK retailers are facing a £2.5 billion hit in 2025 due to rising energy costs, compounded by increased National Insurance contributions, a higher National Living Wage, and reduced business rate relief. For small rural shops, where margins are already tight and footfall can be seasonal, this convergence of pressures threatens not just profitability but survival.

One of the most immediate actions retailers can take is to review and renegotiate energy contracts.

Many businesses are locked into deals that include hidden commissions or inflated rates, often brokered under opaque terms.

Energy Solicitors and other watchdogs have flagged widespread mis-selling of contracts, urging retailers to audit their agreements and seek redress where possible. Switching to transparent, fixed-rate contracts with reputable suppliers can offer stability and predictability.

Beyond contracts, energy efficiency upgrades are proving vital. Simple interventions—like LED lighting, smart thermostats, and better insulation—can yield significant savings.

While upfront costs may be a barrier, community energy schemes and local grants are increasingly available to support these transitions. The Plunkett Foundation's 2025 report on rural retail highlights how cooperative models and shared infrastructure can reduce energy burdens while strengthening local resilience.

Retailers should also explore tariff comparison platforms tailored to small businesses. Sites like Utility Bidder have shown that small retailers typically pay around £5,300 annually for electricity on a one-year fixed contract, making it crucial to shop around and avoid default rates.

Some suppliers now offer green tariffs with community reinvestment options, aligning with the values of rural enterprises while offering competitive pricing.

Finally, collaboration is key. Retailers can band together to form buying groups, share best practices, and lobby for fairer energy policies. Local chambers of commerce and rural enterprise networks are increasingly active in this space, offering both advocacy and practical support.

In a landscape where energy costs threaten to eclipse all other overheads, rural retailers must become proactive energy strategists. By combining contract vigilance, efficiency upgrades, and community collaboration, they can not only survive—but lead the way in building a more sustainable and equitable retail future.

Rural Retailer’s Energy Survival Guide 2025

1. Audit Your Energy Contract
Check your current tariff: Are you on a fixed or variable rate? When does it expire?

Look for hidden commissions: Many brokers add undisclosed fees. If in doubt, request a breakdown or seek legal advice.

Compare suppliers: Use business-focused comparison tools like Utility Bidder or Bionic. Don’t assume loyalty pays.

2. Slash Consumption with Smart Upgrades
Switch to LED lighting: Cuts lighting costs by up to 80%.

Install smart thermostats: Automate heating to match footfall and opening hours.

Insulate: Even basic draught-proofing can reduce heating bills significantly.

3. Tap Into Local and National Support
Check for grants: Look into schemes from Business Energy Scotland, local councils, or LEADER rural development funds.

Join a community energy project: Some rural areas offer shared solar or wind schemes with discounted rates for local businesses.

Ask your MP or MSP: They may know of pilot schemes or discretionary funds in your area.

4. Collaborate with Other Local Businesses
Form a buying group: Pooling demand can improve your bargaining power with suppliers.

Share best practices: What’s working for the butcher or the post office might work for you too.

Lobby together: Join your local chamber of commerce or rural business network to push for fairer energy policies.

5. Communicate with Customers
Be transparent: Let customers know how energy costs are affecting your business.

Promote your green efforts: If you’ve made upgrades, shout about them—it builds trust and loyalty.

Offer incentives: Encourage off-peak visits or loyalty schemes to smooth demand and reduce peak energy use.

6. Plan for the Long Term
Budget for future increases: Forecast energy costs over 3-5 years and build them into your pricing strategy.

Explore renewables: Solar panels, battery storage, or even small-scale wind may be viable with the right support.

Track your usage: Use smart meters or apps to monitor patterns and spot savings opportunities.