Energy supplier switching in April continues to fall

May 11, 2020

We showed last month how the effects of COVID-19 and lockdown measures had begun to impact consumer behaviour and participation in the energy market, after a severe drop in switches started in March 2020.

According to data published today from the Energy Market Data Hub (EMDH), GB switching continues to be negatively impacted as April 2020 recorded both month-on-month and year-on-year decreases in switches started and completed:

  • There were 481,000 changes of supplier (CoS) completed in April.
  • This is 19 percent less than March 2020 and 28 percent less than April 2019’s record 670,000 CoS completed.
  • March 2020 had the second highest number of switches started on record, raising questions as to how April’s switches completed came in so low.
  • April 2020’s CoS completed figures are the lowest for this particular month since 2016.

Graph showing number of CoS completed decreased in April 2020

  • There were 498,000 CoS started in April.
  • This is 30 percent less than March 2020 and 26 percent less than April 2019.
  • April 2020’s switches started figure is the lowest since December 2018 and the lowest for this particular month since 2017.
  • There were fewer CoS started in April 2020 than in December 2019. The last time this happened was 2014/2015. (December usually has fewer switches started due to the holiday season.)

Graph showing number of CoS raised decreased in April 2020

Looking at weekly totals, in the last three years only twice have we seen as few CoS raised as in the last two weeks of April (excluding weeks with bank holidays). These occasions were the run-up to Christmas and two weeks in late June/early July 2018 during the 2018 football World Cup. As during those periods, clearly now consumer behaviour is focused on things other than household utilities.

Graph showing massive dropoff of weekly CoS raised in April 2020 due to COVID

In terms of switching types, all types decreased in number last month compared to the month before, with the sharpest decline in switches to challenger suppliers, both within-group or from the Big Six. However, the only CoS type to increase compared to the same time last year was challenger to Big Six CoS:

  • Big Six to Big Six switches hit 128,000 – 16 percent less than April 2019 and 27 percent of April 2020’s total switches completed,
  • Big Six to challenger switches dived to 162,000 – 48 percent less than April 2019 and 34 percent of April 2020’s total switches completed,
  • Challenger to Big Six switches landed at 74,000 – 17 percent more than April 2019 and 15 percent of April 2020’s total switches completed,
  • And challenger to challenger switches reached 117,000 – 17 percent less than April 2019 and 24 percent of April 2020’s total switches completed.

However, switches to the smallest challenger suppliers, supplying electricity to no more than 250,000 MPANs, actually went up in April, therefore revealing that the larger challenger brands appear to have temporarily seen a lull in interest in their offerings and former customers potentially moved to Big Six brands.

 

For more information on changes of supplier figures, contact Ian Scougal at Ian.Scougal@electralink.co.uk or Paul Linnane at Paul.Linnane@electralink.co.uk

This month’s hot topic…

Last month, we said, “…we are uncertain whether COVID-19 delay measures, which have resulted in thousands being furloughed, will lead to an increase in customer switching requests, or whether switching energy supplier will drop from people’s priority lists as more people’s lives and businesses are disrupted.”

Evidently the latter seems to be more plausible for what happened in April, although the true cause of the drop in changing supplier remains unknown. Now, as the lockdown progresses, social distancing is becoming more commonplace in social behaviour, businesses are reopening and the government makes plans to exit the lockdown, more change seems imminent. Will CoS increase in May or will the continued effects of COVID-19 cause a further slump? Tell us what you think on LinkedIn or Twitter.

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NOTES:

The above figures relate to electricity switching in Great Britain only.

We do not include CoS from Supplier of Last Resort (SoLR) processes or trade sales in our monthly CoS reporting. We account for only voluntary switches, or instances where the customer made an active decision and took action to change supplier.

Switches started refers to the number of valid switches started, also known as CoS raised.

All data is provided by ElectraLink’s Energy Market Insights (EMI) from the EMDH.

ElectraLink has been granted the governance protections to hold, transfer and analyse CoS and other data.

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