British SMEs Waste £1.7 Billion a Year by Not Switching Gas Supplier

–          Small and medium-sized businesses currently spend over £7 billion a year on gas

–          Savings could top £1.7 billion a year by switching gas supplier

–          One third of businesses don’t realise the savings that can be made by switching

–          Spending too long on hold, and international call centres top biggest non-monetary complaints

A new report out this week has revealed that small and medium-sized businesses (SMEs) in England, Scotland and Wales currently waste over £1.7 billion* a year by not switching their gas supplier.

According to the ‘Flogas Business Energy Report 2016’, the businesses, which are likely to include restaurants, warehouses, offices, manufacturing companies and public sector buildings currently spend £7.1 billion* a year on gas for their heating and manufacturing processes, a huge 24.4 per cent more than they need to.

This means that an SME that spends £10,000 a year on gas, could be saving an average of £2,400, equivalent to £200 every month by switching supplier.

However, despite the obvious savings that could be made, the report found that a staggering 32 per cent of businesses weren’t aware of the savings that could be made by switching, and almost a quarter (23 percent) thought it would be too time-consuming or complicated.

Perhaps worse still, is the lethargy around switching. One in 10 business owners (nine per cent) said they couldn’t be bothered to switch, and 13 percent, actually want to switch but haven’t got round to doing it.

Reason for Not Switching	Percentage of Businesses
Didn’t know we could save, or how much we could save	32%
Thought it would be too time-consuming or complicated	23%
Couldn’t be bothered	9%
Didn’t realise we could switch	3%
Want to switch, but haven’t got round to it	13%
Been with the same company for years	19%

Source: Flogas Business Energy Report 2016

Broken down regionally, businesses in the North-West of England were wasting the most money, followed by those in Yorkshire and Humberside, and London, who each cumulatively waste more than SMEs in the whole of Scotland.

Region	Total SME Spend on Gas	Potential Saving by Switching Gas Supplier
North West	£992,408,167	£242,386,417
Yorks and Humbs	£863,198,333	£210,744,833
London	£807,238,000	£197,632,000
Scotland	£774,832,333	£189,239,833
South East	£710,520,500	£174,010,250
West Midlands	£655,620,833	£160,200,083
East of England	£598,973,667	£146,386,167
East Midlands	£534,310,500	£130,565,250
South West	£442,328,500	£108,180,250
Wales	£351,014,833	£85,733,083
North East	£314,704,167	£76,896,417
Unallocated	£59,016,667	£14,418,667

Source: Flogas Business Energy Report 2016

With a constant need to increase profits, businesses are under ever-growing pressure to reduce costs, and energy bills can be one of the best ways to do this. In fact, the ‘Flogas Business Energy Report 2016’ found that over half (54 percent) of businesses questioned, named reducing energy costs as the number one way to reduce overheads.

Commenting on the findings, Pete Ablett, Commercial Director at Flogas, said: “Many businesses don’t realise they are literally throwing money away by not switching.

“We find the most common reasons that businesses don’t switch are a lack of awareness that there is a cheaper alternative, or because they are under the misconception that switching is complicated. By sharing these figures we hope to wake people up to the money they could be saving.

“We know that we can save businesses around 24% a year, especially if they haven’t changed their supplier recently, and switching to Flogas is so simple. Just tell us you want to switch, and we’ll do everything else, including telling your old supplier.”

The study also looked into the common non-monetary problems that businesses have with their energy suppliers, and the results were interesting. A quarter (24 percent) of those questioned complained about international call centres, while almost three out of 10 (28 per cent) were unhappy about sitting on hold for too long. Billing was also an area where businesses had issues, with 36 per cent not understanding their bills or pricing structure.

Most Common Non-Monetary Complaints	Percentage of Businesses
International call centres	24%
Spending too long on hold when trying to call them	28%
Not understanding bills	17%
Not understanding pricing structure	19%
Unhelpful call centres	14%
Hidden costs or nasty surprises	18%
No help in forecasting gas usage	15%
Bad customer service	15%

Source: Flogas Business Energy Report 2016

Ablett concluded: “We have over 30 years’ experience in supplying energy, so we know what businesses want. We weren’t surprised by the non-monetary problems, which is why we have personal account managers, rather than international or unhelpful call centres with long waiting times. Our bills are easy to understand, and our pricing is transparent – we hate hidden surprises too! We even give our customers online reporting tools so they can easily monitor and forecast their gas spend, helping in overall business planning.