The energy retail sector has just lived through some of the most turbulent years in retail history. For many, survival was the only metric that mattered. Yet, as the dust settles, a counterintuitive reality has emerged: for many B2B suppliers, the crisis years were actually a period of exceptional returns.

But that era is over.

Last week, we gathered leaders from some of the world’s largest energy retailers to discuss the future of our industry. We were delighted to host a keynote from Ryan Thomson at Baringa, along with panel discussions with Simon Gill from British Gas, Pieter Theuwis at EDF, and Andy Hughes of Yü Energy. While the mood was collaborative, the message from the stage was a stark reality check: the market has likely passed "peak profitability". As we look toward 2026 and 2027, the "easy" margins written during the crisis are rolling off, and a new, far more competitive environment is taking shape.

Here is what we learned about the coming squeeze and why the old playbook for managing margin is no longer enough.

1. Stability is an illusion

For a long time, energy retailers operated on a blueprint of stability. The chart above illustrates data from Consolidated Segmental Statements across the past few years. As you can see, data from 2019–2021 shows a market where margins were tight but predictable. If you got your hedging right, you could model your year with reasonable confidence.

That blueprint has been shredded. By 2022–2023, the data shows a market where margins have "spread all over the screen". Volatility has become the baseline for retailers.

The headwinds facing retailers in the UK are intensifying:

• The "Concertina Effect": A mass of short-term contracts signed during the crisis is bunching up for renewal, creating a potential revenue gap in 2026/27.
• New Debt Risks: Insolvency rates are peaking, and 20% of SME customers are currently in debt to their suppliers.
• Operational Shocks: The move to Market-wide Half-Hourly Settlement (MHHS) and the insatiable demand of new data centres threaten to upend forecasting models and create REGO scarcity.

However, it’s not just a UK issue. While the above problems are specific to the UK market, every retailer around the world could describe stories of regulatory change, surging demand (particularly from data centres), and margins that have fluctuated wildly in response to market volatility.

In this environment, relying on historical averages or static spreadsheets becomes a risk to long-term survival.

2. The threat of "Invisible Erosion"

While retailers are naturally fixated on big events like wholesale spikes or regulatory shifts, margins are often bleeding out from a thousand papercuts. This is the phenomenon of invisible erosion.

Even when the big number looks healthy, value is being destroyed quietly in the background.

Discrepancies between forecast and actual volumes lead to imbalance ratios that risk premiums fail to cover. Settlement drifts (tiny daily reconciliations) chip away at the bottom line but rarely trigger an alert on a daily invoice. Forecasts of costs like non-commodity charges that don’t react to small changes. Gaps in the timing of hedges, even intra-day, that lead to slight losses of value.

Finally, as Gorilla’s Ben Dennett put it, the "Visibility Gap": The disconnect where pricing teams model a healthy theoretical margin, but finance teams report a much lower realised margin weeks later.

Retailers have been able to ignore the small events over the past few years due to the big events falling in their favour. While price spikes have had plenty of downsides, the biggest impact on the market has been the elimination of a host of small competitors that couldn’t keep up. As and when the wholesale market turns more competitive, retailers will have to find new sources of competitive advantage, while the small mistakes hidden below the surface will start to hurt.

As highlighted during our event sessions, these small mistakes accumulate. If you cannot see them, you cannot fix them.

3. Silos are the enemy of speed

Perhaps the most critical takeaway from the leadership panel with Simon, Andy, and Pieter was that the biggest barrier to profitability is internal. Margin management is currently "everyone's responsibility, but nobody's job".

We see this in the data silos that plague even the most sophisticated Tier 1 retailers. Sales, Pricing, and Trading teams often operate with different datasets or different “versions of the truth".

• Sales teams push for the lowest price to win the deal.
• Risk teams try to protect the downside.
• Finance teams count the cost after the fact.

Without a unified view, retailers are flying blind. As Andy Hughes noted, the goal must be "one version of the truth" that allows teams to move fast without breaking governance.

The solution: Energy Margin Intelligence

The consensus from the event was clear: we cannot solve 2026 problems with 2019 tools. The data is there but there is nothing to bring it together so that retailers can really understand their margins and start to prioritize margin growth.

To thrive in this new reality, retailers must move from simple data processing to Energy Margin Intelligence (EMI). This was the driving force behind our launch of the new EMI platform: a system designed to connect the dots between pricing, forecasting, billing, and finance.

Energy Margin Intelligence is built on four pillars that directly address the challenges of the new market:

1. See: Gain a real-time view of profitability at the contract level, not just the portfolio level. You need to know exactly which customers are eroding value.
2. Steer: Empower sales teams to price with confidence, ensuring that every deal starts out profitable and stays that way.
3. Protect: Stop margin leakage by aligning your pricing logic with your billing reality, ensuring that complex products can actually be invoiced accurately.
4. Grow: Use data and AI to proactively recommend the right product mix for retention, rather than reacting only when a customer churns. Start building sustainable, high margin growth.

The next step

The warning shots from PJM and the volatility of the European markets are not anomalies. They are the new normal. Retailers who continue to rely on legacy tools and siloed teams will find themselves squeezed by the tightening market. 

Nonetheless, our event ended on a positive note, as those who embrace Energy Margin Intelligence will have the clarity to turn volatility into a competitive advantage. 

Every attendee was able to see how Gorilla’s new EMI platform would enable them to see, steer, protect, and grow their margins. Ready to do the same?

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