Awareness of water retail market ‘in danger of stagnating’

The water industry needs to “step up” its efforts to engage with customers to ensure awareness of the non-domestic retail market among small businesses does not “stagnate”.

The warning comes from water watchdog, the Consumer Council for Water (CCWater) prompted by its latest research, which found less than two out of five (38 per cent) small and medium-sized businesses (SMEs) in England think they can switch supplier.

CCWater surveyed more than 500 SMEs last month, but it said awareness levels “have not shifted” when compared to its first wave of research, which was carried out in July last year.

The watchdog is concerned many small businesses are still unaware of a market, which it describes as having the potential to provide customers with “lower bills and customer service improvements”.

Tony Smith, chief executive of the Consumer Council for Water, said: “We want choice to work for everyone, from the smallest to the largest business, but that relies on customers having an awareness and understanding of the market.

“All of us in the water sector need to ask ourselves are we doing enough to reach out to small businesses and help them understand why this market is worth engaging with. At present our research shows there is a lot more to do. We must not allow awareness levels to stagnate.”

CCWater said it has been working with business representative bodies, including the British Chambers of Commerce and National Farmers’ Union (NFU), in an effort to reach out to businesses across several sectors over the past 18 months.

The watchdog said its latest research found only a quarter of SMEs, when prompted, were aware of the changes to the water market in England, which opened to competition in April 2017.

The research also showed once customers were aware of the market the “vast majority were keen to explore their choices”. Almost half (47 per cent) had looked for more information, with just under a third (31 per cent) having negotiated a better deal with their current provider, while only a quarter (24 per cent) had switched supplier.

Larger businesses were shown to be more likely to take action with seven out ten medium-sized enterprises saying they would try to find out more about their options in the coming months.

More than 100,000 supply points have switched water retailer in the first 10 months of the market, according to recent figures released by Market Operator Services Limited (MOSL).

A spokesperson from MOSL, said: “We fully support the important work that CCWater, Ofwat and the industry are doing to address the issue of customer awareness in the non-household retail water market.

“The market has shown encouraging signs of growth during its first year, but there is more work to do to ensure that customers, especially smaller businesses, are aware of the benefits available to them.”