Savings to be ‘more than expected’ in water retail market

Waterscan “pleasantly surprised” by customer savings while Water Plus worries about a focus on switching in the new market

Water consultancy Waterscan has suggested savings returned to large multi-site customers in the competitive non-domestic water market will be “more than expected”.

Many commentators have predicted that low margin for retailers in the English business water market will limit the amount of direct savings switching retailer will yield for customers.

However, Waterscan managing director Neil Pendle said at Water UK’s City Conference last week that he was “pleasantly surprised” by the reasonable savings the consultancy has seen.

“We ran a tender for Sainsbury’s, which will be announced very shortly, and the sort of savings they’ve got are much more than we’d expected – and as Waterscan, we were quite optimistic,” he said in a panel debate.

Pendle also said he believed there is a “service revolution” coming in retail, but this will not arrive on the first day of the market. “We’ve got to realise there is a lot of work to be done in the retail service offering, particularly around the billing and the data.”

Water Plus chief executive Sue Amies-King was also on the panel. She said the success of the market should not necessarily be judged on the level of customer switching, because a lot of customers will take the opportunity to renegotiate what they have.

She said high levels of awareness would be a better measure, as well as innovation, efficiency measures and the arrival of disruptive new entrants.

Pendle disagreed. He suggested switching was a good metric – in the short-term, at least. He said he would like to see 10 or 20 per cent of the market switch in the first year. He agreed with Amies-King that water efficiency would be a “far bigger piece” than switching or saving.