Published on December 5th, 2019 | by The GC Team0
Energy prices “threat to future of small UK retailers”
A survey carried out in September by survey consultants Ginger Comms for Utilita Energy, one of Britain’s largest independent energy suppliers, has prompted Utilita to argue that “the energy market is failing Britain’s small retailers,” as high street SMEs are “forced to cut jobs and scale back opening hours to make ends meet.”
The findings, published in Utilita Energy’s third annual Powering the High Street Report, show that more than a third of micro-retailers (39%) have cut staff working hours, more shop owners are worried about the rising cost of energy than they are about Brexit, and 79% have seen their energy bills rise by more than £100 per year.
Other measures employed by small retailers to reduce the effect of energy costs include keeping doors closed (81%), leaving lights off during the day (76%) and not switching the heating on (74%).
Despite Ofgem’s announcement in its strategic review of the microbusiness energy market, says the Report, two thirds of independent retail outlets (65%) say they are still caught out with unexpected terms and conditions when signing a new energy deal. These include “inflexible payment terms, crippling rates, high connection charges and long contract periods”.
Nearly half are still asked to make large upfront deposits to secure their supply, with a third placed on high tariffs, as they’re seen as a credit risk.
Utilita CEO Bill Bullen said: “We commissioned our first annual Powering the High Street report in 2017 as we knew many retailers found it hard and costly to engage with suppliers to find a better deal on energy.
“We’ve learned 68% of small businesses surveyed overall do believe their provider gives them a fair deal. Let’s hope this is a sign of things to come.
“But there is a lot of work to do – it’s still concerning to see so many micro-retailers worried about the cost of their energy rising and payment pressures and how this impacts their workforce.
“The country’s retailers have a lot to contend with in today’s uncertain economy as business rates continue to climb and the power of the pound isn’t what it was – it is concerning that access to energy is such a huge concern for many.”
There were 5.7 million SME businesses in the UK last year, accounting for 96% of all businesses. This population fell by 0.5% from 2017 reflecting closures of smaller, non-employing businesses.