East Midlands wastes £130m a year on gas

East Midlands Businesses Waste £130 Million a Year by Not Switching Gas Supplier

- Local small and medium sized businesses currently spend over £½ billion a year on gas

- Savings could top £130 million a year by switching gas supplier

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

A new report out this week, by Leicester-based company Flogas, has revealed that small and medium sized businesses (SMEs) in the East Midlands currently waste over £130 million* a year by not switching their gas supplier.

According to the ‘Flogas Business Energy Report 2016’, the local businesses, which include restaurants, warehouses, offices, manufacturing companies and public sector buildings currently spend in excess of £534 million* 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 per cent) 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 per cent, 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 it13%

Been with the same company for years 19%

Source: Flogas Business Energy Report 2016

The East Midlands isn’t the only area where businesses are wasting money in this way, as the pattern is repeated across the UK. The North-West sees the largest cumulative waste, followed by Yorkshire and Humberside, and London.

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

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

North East £314,704,167 £76,896,417

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 per cent) 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 per cent) 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.