Four in ten SMEs believe there’s no competition in the business energy market – and miss out on £1.8bn in savings
The recently released results from the Business Energy Barometer on EnergyForecaster.co.uk point out that four in ten SMEs – equating to a staggering 2 million businesses – are of the belief that there competition in the business energy market doesn’t exist and as a result, they see no point in switching. It is known that these businesses could be losing out on a collective saving of £1.8bn. Compared to the last quarter’s results, this is a significant 13% increase in businesses that think there is little or no market competition.
The number of businesses that are taking action and switching supplier is also dwindling – the most recent survey found that in 12 months, only 41% have changed, in comparison with the 61% three months before. 90% of businesses have said that if prices were to go up by 15% a year it would impact their operations, and 8% have said it would cause them to close completely – this is a cause for concern.
With price rises from all of the ‘Big Six’ energy suppliers, a move by government to force providers to give the customer the best possible deal and the publication of the Energy Bill, there has been significant buzz around the subject of energy in the last three months. Though most of these occurrences only affect home energy bills, the conversation around the industry seems to be contributing to a shift in businesses’ opinion of the energy market.
James Constant, Chair of EnergyForecaster.co.uk posits: “Competition is critical – if the business energy market isn’t seen as competitive then customers will not see the value in seeking out the best tariff. This seems to be the case currently, with the Barometer showing a significant decrease in the number of businesses switching. This lack of engagement will have a direct impact on businesses’ bottom line, particularly for the SME market where, on average, energy bills now account for almost 1% of turnover**.
“There could also be a knock-on impact on UK PLC – 8% of those polled say that 15% price rises would force them out of business, and average business energy prices are up by almost 13% so far this year. The issue needs to be addressed as these businesses form the backbone of the UK economy.”