Utilities suppliers face new threat

1 March 2001
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01 March 2001

More than 50 per cent of businesses would consider abandoning their traditional utility supplier in favour of a new entrant, according to a survey by utilities consultancy Convergent Europe.

Price was the most widespread factor when choosing a supplier, but 83 per cent of buyers also looked for value-added services, such as receiving a breakdown of utility expenditure to improve monitoring and control of usage.

"Unless traditional utilities companies offer value-added services, it will be harder to stave off competition from new entrants, such as supermarket chains, which command greater brand loyalty," said David Pitt, president of Convergent Europe.

David Kwiatek, group energy buyer at the Eastern Shires Purchasing Organisation, said new entrants were often bargain basement concerns offering a "no-frills service" and would have trouble providing sophisticated value-added services.

The survey, based on responses from over 300 utility buyers, found half of them are keen to buy all their utilities from one supplier only. Ease of buying and cheaper bills were the key drivers.

But Kwiatek said buying from one supplier was not necessarily advantageous. "Our research shows you pay more if you put all your eggs in one basket."

• For more information, contact Convergent Europe on 01932 796008

SMmar2001

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