Energy suppliers: ‘Greater product diversity will fuel competition’
Senior executives from SSE, Npower and E.ON claim upcoming plans to ‘inject’ diversity into their products will help prove to customers they are getting a quality service, adding it will allow for greater competition across the sector.
Speaking to the Energy and Climate Change Select Committee yesterday (29 October) about the recent wave of bill hikes that have swept across the country’s energy industry, three of the biggest suppliers said strategic moves to diversify their retail businesses beyond traditional tariffs would give them an edge in winning new customers.
William Morris, managing director of retail for SSE, said the products currently on offer in the sector are limited, adding a paradigm shift into areas such as home services and telephony would give it a better service to market to consumers. The business has recently launched an O2 Priority-style rewards scheme to capture more shopper data, while E.ON is looking to broaden its energy efficiency services next year.
Morris adds: “We need to inject more diversity of products into our offers so that there is a perception from customers that they are getting a better service from us. We should be looking at bringing home services and telephony to the market to make it more diverse. “
E.ON’s UK chief executive Tony Cocker echoed the call for expansion into new areas, urging MPs to launch a competition inquiry into the whole utilities market. The business, which has yet to announce price rises, said a review would be vital to restoring customer trust in the industry. It echoes a similar plea by rival provider EDF Energy earlier this month.
Cocker adds: “I fundamentally believe that this market is competitive but we are not trusted and therefore I believe we need to have a very thorough competition commission investigation.”
Ofgem, which has drawn criticisms from Labour leader Ed Miliband and campaign groups for not being harder on the UK’s biggest suppliers, told MPs at the same hearing that competition would be examined as part of a wider review of the sector due out in Spring 2014.
The Big Six energy firms were accused of behaving like a “chorus line acting in concert” by MPs at the same hearing following widespread price increases of up to 10 per cent. The provider blamed the sharp increases on rising wholesale prices, green taxes and transport costs, but admitted they needed to be better at “articulating” theses reasons to customers.
The announcements come just days after Prime Minister David Cameron revealed he was “frustrated” with the dominance of the Big Six firms and wanted to make a “big 60” market, with greater choice for consumers and “healthy” competition keeping prices down. Details of the competition review is set to be outlined later this week in Energy and Climate Change Secretary Ed Davey’s annual statement.
