A majority of convenience stores are still struggling to shop around regularly for the best energy deals, new research reveals.
The findings, from independent energy provider Utilita, come as Prime Minister Theresa May faces pressure for a cap on energy prices in the consumer market in a letter organised by Conservative MP John Penrose, signed by 192 cross-party MPs.
Utilita says its research among 254 UK convenience stores in May this year found 58% struggle to shop around regularly for the best energy deal.
The findings, detailed in its Powering the UK High Street report, are in stark contrast to the UK consumer market where Utilita said almost five million people switched their electricity provider last year – a 26% increase on the previous year.
The survey also found that just 46% of c-stores believe they are getting a fair deal – and often face crippling upfront deposits, high tariff rates and prohibitive payment structures.
Other findings were:
- · 42% review their energy at least yearly
- · 20% review their deal every two to five years
- · 13% admit they have never shopped around for a better deal.
Vic Grewal, who owns a Budgens store in Thames Ditton, Surrey, has used a consultant for the past four or five years who looks at the best deals annually.
“He’s independent and not tied into a particular company. He comes up with three quotes for three different companies. I usually take an annual contract because 99% of the time the one-year contracts have been best,” he said.
Vic said he was not totally sure he was offered the best deals “but when you’re running a business you don’t have time to do it yourself”.
Steve Basset, owner of two Londis stores in Weymouth, in Dorset, Bridgewater Somerset and a One Stop in Southampton, Hampshire, also uses a broker.
“I don’t know if I get a good deal. It’s a minefield. I tend to change supplier every one to two years spending on the existing contract.”
Nisa Retailer Russell Jenkins, co-owner of Milverton Stores, in Taunton, Somerset, said: “Typically you are on fairly long contracts so it’s something that happens every two or three years. Swapping and changing contracts midway through is usually quite difficult. It’s not something we do terribly often. The last contract we entered was for three years which ends the middle of next year some time.”
He said the biggest issue for him was not so much the price of the suppliers, which he said were “much of a muchness”, but it was trying to reduce consumption by putting in the likes of LED lighting.
“We are still running with open chillers. We are constantly looking at ways to see if there is a cost-effective way of retrofitting those [with doors] but at the moment there’s no supplier we’ve looked at that’s been able to provide us with a decent solution to retrofit onto our existing cabinets. Spending £20,000 on cabinets to save a few pounds on electricity is a difficult call to make.”
The Competition and Markets Authority has ordered energy firms to stop locking firms into expensive, automatic rollover contracts and make it easier for them to compare the cheapest energy prices.
However, pressure to introduce price caps in the consumer market has not so far filtered into the small business market.
The Association of Convenience Stores said its work on the energy sector had been around improving the standards of conduct that suppliers adhere to rather than the control of prices.
Shaun Underwood, director of Utilita Business Energy, said: “We understand that many small businesses are time-poor and can find securing a fair energy deal challenging as they often face cash-flow problems. More needs to be done by the UK energy sector to provide these businesses…with a fairer and easier solution.”