Download our app
You can pay in cheques, transfer money, and do much more, all from your mobile.
Resilience in retail: Four ways to cut costs
Read time: 3 mins Added: 09/07/25
With outgoings on the rise for many UK retailers, we explore four ways you can cut operating costs to navigate uncertain times more confidently.
Smaller retailers are at the heart of communities up and down the country and are facing struggles when it comes to the squeeze on margins. While some challenges caused by the pandemic may have eased, April 2025 saw rising costs in employer National Insurance Contributions and the minimum wage1.
Here are four ways you can reduce your outgoings to deliver tangible benefits and stay competitive:
1. Could you uncover sustainable energy savings?
With retail being the third largest sector in terms of energy use, finding efficiencies can deliver significant savings. One of the best places to start on your journey to reduce energy consumption is to switch to LED lights, which are the most energy efficient2. You could also look into:
- installing dimmer switches
- improving draught-proofing
- ensuring annual maintenance of all equipment is carried out.
As a small business, you may benefit from discounted lending as part of our Green Asset Finance offering.
2. Where could AI and tech take your retail business?
Automated chatbots could reduce your operating costs if you sell goods online. For example:
- answering FAQs
- tracking orders
- providing information on your returns policy 24/7.
53% of retailers and consumer organisations said that achieving cost savings would be the biggest benefit of adopting AI3.
Using software and AI to analyse your POS data and highlight seasonal trends can help with stock management and sales forecasting, ensuring you run a much tighter ship. By switching to Lloyds Cardnet®, you might also be able to save on your card processing costs and start taking card payments when you’re out of store at local markets and trade shows.
3. How to drive down costs with your suppliers
Cutting your supplier outgoings without compromising quality is another way you can save money. For example, when did you last do any of the following?
- use your track record to get more time to pay invoices or negotiate preferential rates
- get like-for-like prices from other suppliers to use as a bargaining tool
- collaborate with other businesses for bulk buying discounts.
When the overall costs of running your business are rising, it pays to schedule an annual supplier review because it can help increase your profit margins without raising your prices.
4. Get forensic with your finances
Setting time aside to review your income and expenses regularly can prevent many small business headaches. For example, you might be able to save money by switching the following part way through your financial year:
- your energy supplier
- card payments provider
- business broadband company.
With so many operating costs rising across the board, maintaining a strong cash flow is more crucial than ever. If you’re a retailer that sells to other businesses as well as the general public, you could benefit from our Invoice Finance facility. You can get up to 90% of your invoice values paid within 24 hours to improve your working capital.
Taking a proactive approach and analysing every detail of your retail business can uncover several ways to save money, some of which you might not have previously considered.
You may also be interested in
1 IFS - Combined impact of minimum wage and tax increases may reduce opportunities for young people
2 Energy Saving Trust - Energy saving light bulbs and lighting
3 Retail Economics - The impact of AI on the UK retail industry