The introduction of the 5p plastic bag charge has prompted shoppers to use almost 80% fewer single-use carriers, says supermarket giant Tesco.
Figures show that online shoppers are also opting to cut down on plastic, with the number of "bagless" deliveries increasing by half.
Tesco reported that the 78% plunge in single-use bags has exceeded its expectations by about 10% since the Government introduced the levy in October in a bid to reduce non-recyclable litter.
The charge is expected to raise millions of pounds in profits and retailers are being encouraged to donate profits from the charge to charitable causes.
Tesco has said it will be investing in supporting community projects working on improving green space, and is calling on community groups and charities to apply for the grant by the end of next week.
Rebecca Shelley, Tesco group communications director, said: "We knew the Government's bag charge would encourage our customers to use fewer plastic bags, and it's clearly had a huge impact.
"We wanted to do as much as we could to help our customers avoid paying the charge - the week before the charge was introduced we gave out free bags for life, and we've been sharing helpful hints and tips on how customers can cut down the number of bags they use.
"We're also working with our customers to make sure the millions of pounds that will be raised from the bag charge go towards making a real difference for our local communities."
The supermarket is offering grants ranging from £8,000 to £12,000, and applications are open until December 11.
While the plastic bag charge has only been compulsory in England for the last two months, it has been in effect for some time in other parts of the UK and has seen huge success.
Asda has seen more than a 90% overall reduction in single-use carriers across Northern Ireland, Wales and Scotland, and has spent more than £1 million raised by the charge on charitable causes.
Environment Minister Rory Stewart said: "I'm really delighted that the 5p plastic bag charge is starting to have a real impact and is raising thousands for good causes.
"Cutting the number of plastic bags we use is a small but vital step in reducing plastic waste. It will not only tidy up our towns and countryside, it will also help protect our precious beaches and sea life."