Retail Reduced – January 2026

Retailers across the UK are facing an unprecedented surge in shop crime. According to the Office for National Statistics, shoplifting offences in England and Wales reached 530,634 in the year ending in March 2025 – a 20% rise compared to the previous year. Furthermore, a Usdaw survey of nearly 10,000 retail workers found that 70% had experienced verbal abuse, 46% had been threatened and 18% had been assaulted. Faced with mounting losses and safety concerns, many retailers are increasingly turning to anti-theft technologies such as body-worn cameras, fortified kiosks and facial recognition technology (FRT) to protect their staff, customers and stock.

Sainsbury’s completed an eight-week trial of FRT in two of its stores to identify serious repeat offenders and recently confirmed plans to extend the technology to five further London stores. Other well-known retailers such as Budgens, Flannels and Sports Direct are among the high-street businesses that have also signed up to Facewatch – a cloud-based facial recognition security system that scans customers as they enter the store and alerts staff if a known offender is detected. But are these measures effective? Early evidence suggests they are. In 2023, Facewatch reported that stores using its system saw crime rise by just 1.4%, compared to a 44% rise in stores without its system. Moreover, Sainsbury’s highlight encouraging early results as trial stores saw a 46% reduction in theft, harm, aggression and anti-social behaviour.

However, the rise of FRT in retail premises has sparked controversy. Campaign groups have described the biometric technology as “chilling” and “Orwellian”, warning of the risks of misidentification and data privacy concerns. FRT works by capturing an image or video of a face and converting it into digital format to create a unique facial signature, which can then be compared with stored data to confirm someone’s identity.

In the UK, the use of FRT is primarily governed by the Data Protection Act 2018, the UK General Data Protection Regulation (UK GDPR) and the Data (Use and Access) Act 2025. UK law treats facial data as special category data, which must be managed with additional care and specific requirements apply for processing such personal data. Two key issues arise. The first is transparency: customers must be clearly informed when their faces are being scanned and for what purpose. The second is data security, which includes preventing “function creep” by ensuring that data collected from systems originally introduced to tackle theft are not later repurposed for marketing or customer tracking purposes without clear consent.

FRT can provide tangible benefits to retailers in combatting shop crime, but it must be deployed responsibly to ensure compliance with the law and maintain public trust. Below are some key considerations for retailers considering adopting FRT:

• Ensure you clearly explain the use and purpose of FRT to customers.
• Ensure you are only using the technology for a specific, lawful purpose such as to prevent theft
• Implement strong security measures to protect personal data from misuse or breaches.

The era of effortless, cost‑free online returns is rapidly disappearing as UK retailers face mounting logistical and financial pressures. Once considered a customer friendly staple of e‑commerce, free returns are now being replaced by data driven, tiered charging models most visibly led by ASOS, whose policy changes have intensified debate across the sector.

Rather than simply discouraging returns through flat fees, ASOS has shifted toward a more behavioural, data‑led model. Under its updated system, shoppers whose personal return rate exceeds 70% now fall into a higher scrutiny category, where their own return behaviour directly shapes how the policy applies to them. This is tracked through ASOS’s new personal return rate tool, which gives customers visibility of the proportion of items they send back over a 12‑month period. When a shopper’s historical return rate rises above the 70% threshold, they qualify for return charges, and if their return behaviour improves, they can move back out of the fee-liable group. This approach signals a clear shift in how retailers want customers to engage with the return process. Making the 70% metric visible introduces a form of behavioural feedback, prompting shoppers to reflect on their patterns rather than stumble into charges unknowingly.

Across the wider retail landscape, the direction of travel is much the same. During the most recent peak trading period, a striking share of returns were no longer free, with many retailers now introducing paid return models as standard practice. Nearly half of all returns made between Black Friday and early January 2026 carried a fee, and among smaller brands, that proportion was even higher. The pattern underscores a shift that has been building quietly for some time: retailers are increasingly recognising that the traditional, no‑limit returns culture is no longer compatible with rising logistics costs, swelling return volumes and the environmental impact of shuttling products back and forth.

This shift also ushers in new legal expectations. Behaviour based returns models must be transparent, fair and consistently applied to meet UK consumer law standards. As policies become more data led, retailers must ensure customers understand how and why charges arise.

Customers are increasingly concerned about the environmental impact of the products they buy, causing retailers to increasingly make claims about products’ environmental credentials. In turn, regulators (including the CMA) are increasingly investigating whether these claims are accurate. With the CMA now able to levy significant fines against non-compliant retailers, the accuracy of environmental claims is a key financial and reputational issue for retailers.

The CMA has now published new guidance supplementing the Green Claims Code. The Code was published in 2021 to set out the rules on businesses making claims that a product has a positive environmental impact. In short, environmental claims must:

• be truthful and accurate;
• be clear and unambiguous;
• not omit material information;
• make fair comparisons;
• consider a product’s entire life-cycle;
• be supported by robust, credible evidence.

The guidance – “Making green claims: Getting it right, across the supply chain” – was published on January 22^nd 2026 and focuses on liability when one party in a supply chain makes green claims about a product. The guidance is applicable to any business in a supply chain that makes green claims about products to consumers (whether directly or not – see below), making it highly relevant for retailers.

A key takeaway for retailers is that “a business may be deemed to be repeating an environmental claim where it stocks a product”. Retailers who sell a product that makes an environmental claim may face liability, even where they do not make any claims themselves. The guidance is clear that unintentional breaches may still attract regulatory action, leaving retailers to justify claims (or omissions of relevant information) made by product manufacturers who may not be willing to share the evidence required by the CMA. The potential scope of liability for retailers is therefore very wide.

Enforcement cases may occur against retailers and/or supply chain parties, depending on who the CMA considers the most appropriate party to investigate – likely, but not necessarily, the party that made the environmental claim. Enforcement action may include orders to ensure compliance and/or fines, which will be assessed based on severity, the size of the business, and any aggravating or mitigating factors. These include whether the retailer had (and followed) procedures to check environmental claims, whether the retailer has taken steps to comply, and whether guidance on the issue has previously been published.

For now, retailers should take steps to get and verify any evidence required to substantiate any claims they make about a product they sell, or that the product makes about itself. This might include contractual clauses in supply agreements requiring evidence to be provided, or supplier questionnaires seeking further information. Retailers must also have adequate policies, which will likely include carrying out spot-checks on product descriptions and regularly requesting up-to-date evidence. Where environmental claims cannot be verified, the CMA suggests reconsidering the whole business relationship.

The guidance is a wake-up call to retailers to ensure that their environmental compliance is airtight. The direction of travel is clearly towards stronger regulation on environmental issues, and non-compliant retailers should expect CMA enforcement action.

As 2026 unfolds, regulatory change continues to shape the operating environment for UK retailers. Rather than a single headline reform, the year brings a combination of developments across advertising, pricing transparency, environmental responsibility and consumer protection. Together, these changes require retailers to look beyond narrow compliance and consider how regulation interacts with commercial strategy and customer engagement.

One of the most significant developments for food and grocery retailers is the introduction of restrictions on the advertising of less healthy food and drink (HFSS products). The UK Government has confirmed that from 5 January 2026, paid-for online advertising of HFSS products will be prohibited, alongside a 9pm watershed for television and on-demand advertising. These measures are intended to reduce consumer exposure to HFSS advertising and will have practical implications for digital marketing strategies and agreements with media and platform providers (UK Government guidance on HFSS advertising restrictions).

Pricing transparency is another area of focus. Updated guidance on the Price Marking Order 2004 takes effect from April 2026, strengthening requirements around the display of selling prices and unit prices, both in-store and online. The aim is to improve price comparability for consumers, particularly in high-volume retail categories. Retailers will need to ensure that pricing systems, shelf-edge labels and digital interfaces are aligned with the updated guidance to avoid enforcement risk (Price Marking Order 2004: government guidance, GOV.UK).

Environmental regulation continues to drive operational change through the packaging Extended Producer Responsibility (pEPR) regime. Following its introduction in 2025, the scheme moves into a more impactful phase in 2026, with the development of eco-modulated fees based on the recyclability of packaging materials. Parliamentary briefing materials highlight that this approach is intended to shift costs and incentives across supply chains, encouraging more sustainable packaging design while increasing reporting and cost-allocation obligations for producers and retailers (House of Commons Library briefing on packaging EPR).

Industry commentary also notes that these changes will affect commercial planning and supplier negotiations throughout 2026 (ERP Recycling, EPR compliance challenges in 2026). Overlaying these sector-specific rules is a broader shift in consumer protection enforcement following the introduction of the Digital Markets, Competition and Consumers Act 2024. The Act strengthens the Competition and Markets Authority’s ability to enforce consumer law directly, with implications for pricing practices, promotions and online sales journeys. Guidance for traders highlights the importance of clear pricing, avoidance of misleading practices and transparent consumer communications (Business Companion guidance on pricing practices).

Taken together, these developments illustrate that retail regulation in 2026 is less about isolated rule changes and more about embedding transparency, accountability and sustainability into everyday retail operations. Early engagement with regulatory guidance and proactive alignment of systems and contracts will be key to managing risk while maintaining commercial flexibility.