Water Retail Market - glass half full or glass half empty?

So 3 months on since the opening of the world’s largest water retail market, where are we?     

• Is it delivering - has it met customers’, companies’, regulator’s, Government’s expectations?
• Is it driving real innovation and improvements in customer service?
• Is it reducing costs to customers?

Well the facts, as far as we can gauge, pending publication of data by Ofwat and MOSL in a few months time, are:

• Around 30,000 supply point have switched.   But that’s not 30,000 customers. And 11,000 of those were actually switched in the window before the market officially opened.
• Most of the switching, as expected, has been by multi-site customers, who benefit from administrative savings with a single bill.
• A high proportion of switching has been for sewerage points only. So customers who had separate water supply and sewerage service providers have switched their sites to one supplier for both services.  This is probably more focused in London and the South East where there is a multitude of water-only companies.
• A high proportion of switching customers have been those with sites using less than 1000 litres a day.  (Even the ‘average’ household uses around 450 litres a day, so we’re not talking big water users here)
• That said, awareness is still low, especially amongst SMEs, with an upcoming report suggesting an awareness level of around 40%.
• The 6 largest retailers have around 88% of the market.
• There are now 22 licensed retailers for England listed on the Open Water website.  Of those, 10 are new entrants or from the Scottish market and 12 have been set up by the incumbent water companies – now the wholesalers.

So does 30,000 switched sites in 3 months a successful market make? 

There are many other questions….

Was that 30,000 the ‘bow wave’ from large users and multi-site customers switching, i.e. those who’d been pushing for water competition for years?  So will that current rate, equivalent to 20,000 or so supply points switching over 3 months, continue?   

Of the 1.2 million businesses, public sector organisations and charities, how many have actually switched?

How can the industry raise, and even maintain, interest amongst SMEs in the water retail market?   Are the limited savings for lower water users actually worthwhile set against the time in researching the options and switching?

But it's not just about switching numbers….

How many non-household customers have benefitted so far by renegotiating a better deal or service offering with their current supplier?

Many unanswered questions

So not long off the starting block – is the water retail glass half full or half empty?