Running a hospitality or retail business in London has never been cheap, but the shape of the costs has shifted. Rent and rates remain the headline burdens, yet for many operators it is energy that has become the least predictable line on the profit and loss account. After the price shocks of recent years, a hotel, restaurant group or chain of shops can no longer treat power and gas as a stable background cost. It moves, and often in the wrong direction, and operators are finally giving it the attention they give rent.
What is changing is not the price of energy, which is beyond any single business’s control, but the willingness to manage how much gets used. For a long time, energy in a commercial building was something you paid for rather than something you ran. That is why a growing number of operators, and the landlords they rent from, now rely on platforms that monitor energy use across a portfolio of buildings, connecting to the meters already in place to show where consumption is high and where it is simply being wasted. The largest variable on the bill, the building’s own behaviour, is the one that tended to be left untouched.
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The Waste Is Built Into The Premises
In London, the waste is often built into the premises. A great deal of the city’s hospitality and retail trades from older commercial buildings, converted spaces and units within larger commercial properties that were never designed around efficiency. As the Carbon Trust points out, energy is one of the largest controllable overheads in most commercial buildings, which is another way of saying there is usually a lot of room to bring it down.
Heating and cooling systems are frequently mismatched to how the space is actually used. Plant runs to schedules set years ago. In shared and managed buildings, tenants often have little visibility of what their own floors are drawing, only what they are billed at the end of the quarter. Commercial properties are also increasingly being assessed digitally before investment and management decisions are made.
Start With A Simple Question
The operators getting ahead of this, much like other businesses adapting to changing working patterns, start with a question that sounds obvious but rarely gets asked: where, exactly, is the energy going? Not across the business as a whole, but building by building, hour by hour. Most commercial sites of any size have meters that record consumption every half hour, and under the regulator’s market-wide half-hourly settlement programme, that granular data is being extended across the rest of the market.
It describes the working day of a building in detail. It shows when a restaurant’s kitchen fires up, whether a shop powers down after closing, and how much a hotel draws through the quiet hours between midnight and dawn. Read properly, it turns a vague sense that bills are too high into a specific account of which sites and systems are responsible.
The Overnight Tell
The overnight picture is usually the most revealing. A closed site should settle to a low, steady baseload. Many London premises do not. Systems left running, controls that default back to manual, heating and cooling operating in the same space at the same time: these show up plainly in the half-hourly data and almost never in a monthly bill. For a group with several sites across the city, comparing one building against another exposes the outliers quickly. The branch that costs a third more to run than its equivalent two miles away is not a mystery once you can see the two side by side.
Money Back Without Spending
The appeal in the current climate is that this is recoverable money that needs no capital outlay and no disruption to trading. Fixing a heating and cooling clash is a settings change. Correcting an overnight load is often a timer or a control. Bringing an underperforming site back into line with its neighbours rarely involves buying anything. For a London operator watching margins tighten from every direction, a saving that comes from stopping waste, rather than cutting service or shedding staff, is worth more than most.
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The Compliance Angle
There is a compliance dimension too. Larger businesses already have to report their energy and carbon under national rules, and pressure from landlords, investors and customers to show genuine reductions is only rising. Energy that is actively managed produces lower reported figures as a matter of course. The same work that trims the bill also strengthens the sustainability position, which for London businesses courting corporate clients and institutional landlords is no longer a side issue.
A Change Of Mindset
The wider shift is one of mindset. Energy has spent decades on the wrong side of the ledger, filed with fixed overheads and reviewed once a year at renewal. The operators rethinking it now are moving it across to the variable column, where it belongs, and treating consumption as something to watch and manage with the same discipline they apply to labour or stock. The data already exists in every building’s meter. What has changed is that, with margins under real pressure and prices refusing to settle, London’s hospitality and retail businesses have decided they can no longer afford to ignore it.
For a sector where a few points of margin decide whether a site stays open, that is a rational place to look. The overheads that can be renegotiated have mostly been renegotiated. Energy is the large cost still sitting largely unmanaged, and that is exactly why it is the one now getting attention.
Sources & References
- British Retail Consortium. (2026, April 15). 81% of retail & hospitality businesses admit energy models are no longer fit for purpose. BRC Associate Insight.
- UKHospitality. (2026, April). Hospitality’s 2026 energy shock: It’s time to build your defences. UKHospitality Member Insight.
- Business Energy Calculator. (2026, June 19). UK business energy statistics: Costs, consumption & trends. Digest of UK Energy Statistics (DUKES) & Ofgem data.
- Selectra. (2026, July 28). Restaurant energy bills 2026: Where the kWh actually go and the 8 fixes that cut them. Selectra Energy Expert Guide.
- Ofgem. (2026, July 7). Capacity Market Rules change proposal CP391: Enabling the use of Market‑Wide Half‑Hourly Settlement systems. Ofgem Decision Letter.
- Wikipedia. (2026). 2020s energy crisis. In Wikipedia.
Disclaimer: The content provided in this article is published strictly for general informational and educational purposes only. It is not intended to serve as professional financial, legal, or commercial advice, nor should it be relied upon as such. This article is not intended for promotion or marketing purposes, and readers are strongly encouraged to consult with qualified professionals before making operational decisions.
