Energy companies are holding more than £24 million belonging to Britain’s hospitality businesses. That’s according to an independent study commissioned this year by leading challenger brand, Utilita Energy.
In 2017, there were a reported 5.7 million private businesses across the UK, and 150,000 in the Hospitality sector, and Utilita’s second annual Powering the UK High Street report revealed that two thirds of those surveyed (66 per cent), including cafes, pubs, restaurants and catering companies, have paid at least £250 just to secure their energy supply.
However, with the survey findings also showing the average deposit in the region is £672, the true cost to Britain’s hospitality industry could be far more severe.
Some have even had to fork out over £2,000 – that’s before being charged for any energy usage.
The national study looking into the treatment of small businesses by energy companies also found that a third (34 per cent) of hospitality businesses studied have seen the cost of their energy supply rise between £250 and £500 per year.
Almost half (44 per cent) of hospitality Businesses surveyed believe they get an unfair deal on energy.
It’s the finding that some energy companies are charging an upfront fee, which is causing outrage amongst retailers who are already facing tough economic trading conditions.
Utilita Energy – which does NOT ask for a deposit – said SMEs need all the help they can get.
Bill Bullen, CEO of Utilita, said, “It’s alarming to see small businesses are being asked to pay out so much money – that’s before even being connected. This is a huge amount of money and a major problem for SMEs. That’s certainly what they have told us. It could actually discourage them from switching to another provider – exactly what the Government says it is trying to stop. We never charge our new business customers an up-front fee.”
he continued, “It’s outrageous and we are astonished that our survey has found many hospitality businesses feel they are not being trusted at a time when we should be doing all we can as a country. It is poor to see suppliers are withholding over £24m from hospitality businesses who are paying £250 or more upfront. However, with the average deposit at almost £672, we believe the real picture is far bleaker.”
Utilita’s survey also found that around a third (32 per cent) of Hospitality micro-businesses are being turned down flat for energy supply – with figures up from one in five (21 per cent) compared to a similar research study carried out by Utilita in 2017.
Less than half of hospitality businesses surveyed (36 per cent) are shopping around for a better energy deal every year.
Other key findings from the 2018 survey include the fact that 65 per cent of retail business owners spend up to 10 hours per week on admin – that’s 65 working days a year. On average, they work over 46 hours a week, with 43 per cent working over 50 hours a week, according to the survey.
Last year Britain’s micro-businesses generated £552 billion in sales and employed around 4.1 million people.