Business retail market shows little change in its third year

Business customers are more aware they have a choice of retailer but activity and satisfaction levels remain flat, according to Ofwat’s third annual State of the Market report published last week.

The report, covering the period April 2019 to March 2020, found 58% of all eligible businesses (up from 53%) are now aware of the market, with 96% of large customers aware. However, the annual switching and/or renegotiating rate remained flat at 4% and the take up of water efficiency services remained low with just 6% of switchers receiving new consumption management or leak detection services as a result of switching.

Complaints have peaked and begun to fall, though remain significantly up on pre 2017 levels. Wider satisfaction levels were stable, with around 78% of customers reporting satisfaction with their supplier.

There was better news for self supply, where three additional licences were granted taking the total to 12 at the end of March 2020. And for new entrants who gained 1% of market share in the year. Ofwat also praised MOSL for its leadership on resolving the three key market frictions previously identified (data quality, inefficient wholesaler/retailer interactions, and inadequate wholesaler performance) and the resulting acceleration of action.

Nonetheless the regulator said “the resolution of market frictions continues to require urgent attention from all trading parties”.