Energy costs are one of the biggest risks to convenience stores’ future success, a new survey discloses.
Utilita Energy commissioned survey consultant Censuswide to question more than 500 microbusinesses including cafes, pubs, restaurants, hairdressers, convenience stores and other shops in 12 regions of the UK.
C-stores made up just over half of the businesses questioned. Energy costs came second out of seven overheads and issues that c-stores said posed risk to their future success.
Some 54% of c-stores cited energy costs – 10% more than staffing costs and way more than Brexit, increased competition, reduction in consumer confidence and spending, and inability to pass on price increases.
Just 5% said nothing worried them about the future success of their business. The biggest concern was increasing cost of supplies.
The biggest proportion of c-stores, 46%, believed their current energy provider gave them an “unfair” or “very unfair” deal.
Their gripes included, high deposits, “crippling rates”, inflexible payment terms, high reconnection charges and long, extended contract periods.
Shaun Underwood, director of Utilita Business Energy, said: “We should be supporting Britain’s small businesses in these times of uncertainty – but it is clear that there are a significant and growing number of small businesses that appear to be treated unfairly and have very real concerns.
“I believe customers should not be asked to pay crippling upfront deposits when cash flow is a problem, should not be put onto discriminative contract rates and should not be punished or shunned by suppliers.”
The Department for Business, Energy & Industrial Strategy says micro-businesses now account for an estimated 5.2 million UK private sector businesses making up about 94% of the UK private business sector.
Clare Bailey, independent retail expert and high street campaigner, said it was clear too many of small firms felt they were getting a raw deal on prices and how they were treated.
The survey took place before the ban on automatic rollover contracts for microbusinesses took effect at the end of June.
Lloyd Palmer, manager of Spar, in Tattenhall, Chester, said the cost of energy costs was “a risk” but he was not sure if it was the biggest.
“Other big issues are pricing, availability and the way we are being squeezed left right and centre, and the changes in legislation, particularly cigarettes,” he added.
Ralph Patel, who owns The Look-in, in Woodmansterne, Surrey, agreed with the survey findings that energy costs posed the biggest risk.
He said there were “too many different tariffs” at each supplier and he wanted to see a single standard tariff to make choosing suppliers simpler.