'Concerning times' as energy bills are set to rise
In light of this, The Morning Advertiser spoke to operators in order to gather their opinions on how an increase in energy bills may effect consumer interaction within off home premises.
The Government regulator Ofgem the Office of Gas and Electricity markets, has confirmed changes to the energy price cap, which came into effect from 1 October and is set to continue into 31 December 2024. According to Ofgem, between this period, the bill for an average household that pay for both gas and electricity, will increase to £1717 a year. Which will result in an average increase of around £12 per month as a typical bill. The Government regulator website states, that the new cap is 6% cheaper than this same period last year.
Challenge for business
Owner of the Tamworth Tap, George Greenaway shared his thoughts on the rise, he stated: “I assume more people will come out to offset their own home energy usage but the rise is inhibiting competition.” He continued, “We took a gamble with the first hike and put the rumours of a price cap impacting our bills as scaremongering, but we paid the price in the end. However the government have to rein this practice in and soon.”
According to operations director at Nationwide Energy Consultants, Gerry O'Hara, the price cap applies solely to “domestic suppliers” and “for individuals on a variable DD, their bills are already set to rise to reflect increasing use in colder months” Especially, he added for heating. As shared by Ofgem, individuals are covered by the energy price cap if they pay for electricity and gas by either: standard credit (payment made when electricity and gas bills are received) direct debit, prepayment meter, or an Economy 7 (E7) meter. The specific amount payed will, as their website states vary depending on household, at which location residents live and the type of meter residents have.
Owner of The Loxwood Arms, Rob Barr said he felt the industry was experiencing “concerning times” facing “yet another challenge for not only us as a business but as a nation” Barr described the implications of an increased cap for energy as lowering confidence in spending which, he added “is yet another warning sign that the government is sadly ignoring in this distant dream of stimulating the economy. Barr said “We’ve already seen a drop off on trade versus last year and we are now revising budgets down by 8% to reflect this.”
Re think in strategy
Prices are reportedly unlikely to return to 2022 levels, according to Nationwide Energy, with volatility greater within gas and electricity commodity costs throughout winter.
Owner of Cheshire Cat Pubs and Bars, Tim Bird said: “Anything that impacts our guests and customers in terms of extra personal financial outlay will affect their ability to spend money on going out.” He continued: “Great pubs, are very durable however when times are hard and if you ensure great customer service, high quality food and drink and offer great value for money, then you will be the choice of many.” Bird explained that consumers in his opinion, “will cut back their spending on the less consistent operators”, If venues were consistent in offering high quality options for consumers.
Bird continued: "Offering advice for operators in how best to avoid the negative impact of energy prices, he added : “If you strive to be the best and look after your guests, energy rises won’t impact your business….but it might impact those that have racked up their prices and offer poor value for money…..they will need to re-think their strategy.”
