Challengers grow share in domestic energy market again despite exits

Supplier failures, Ofgem provisional orders, price caps and complaints about customer service levels have all hit the energy headlines since the start of 2019. But anyone expecting these developments to encourage customers to return to the Big Six will be disappointed.

The latest figures from our Domestic Market Share Survey for 31 January 2019 show that the six companies recorded another quarterly loss in their combined share of energy accounts. This holds true even when taking account of the transition of 190,000 Extra Energy accounts to Scottish Power through Ofgem’s Supplier of Last Resort (SoLR) process. Small and medium suppliers (SaMS) recorded collective growth in share of 0.6pp over the three-month period, to hold 27.3% energy account share.

Ovo Energy became the largest challenger brand after taking on the customers previously held by Economy Energy and Spark through two SoLR processes. Together Energy also recorded a high level of growth after adding the OneSelect customers, again after a SoLR. We estimate 1.1mn domestic energy accounts were reallocated through SoLR during the quarter to 31 January 2019. But there also continued to be organic growth for some SaMS, notably Octopus Energy and Bulb.

Brand name plays a large part in consumer decision making – price comparison websites report regular switches to large suppliers, especially when they are listed on the first page of the site. For example, in February, Compare the Market reported that just over 30% of its switches were to EDF Energy with the top four losing suppliers also from the Big Six.

The existing energy brands have been joined by a big new rival following the rebrand of First Utility to Shell Energy. Whilst First Utility had its own recognisable brand, Shell is a more widely recognised name than First Utility but also than most other energy suppliers, Shell has launched a competitively-priced fixed green tariff and loyalty programme to stake its claim. It will be firmly on the radar of all its rivals.

The latest developments in domestic energy competition feature highly in our upgraded training course on the GB retail market. The new agenda for the course, GB Energy Retail Competitive Landscape, addresses the key themes picked up in our ongoing research across the business and domestic supply markets, including:

  • Supplier consolidation and the drivers of entry and exit
  • Types of propositions and the price cap
  • An overview of the smart metering obligation and the roll-out to date
  • Supplier developments in the electric vehicle market

For more information, please get in touch with a.moss@cornwall-insight.com or to see the agenda please visit our website here.

Related thinking

Home supply and services

Will customers pay for suppliers reconsolidating?

There’s been a lot of media about Scottish Power chief executive Keith Anderson’s comment about a “massacre” in the retail energy market. The spectre of a return to a handful of domestic energy suppliers has been raised. We are certainly going to a world of many fewer suppliers, in my...

Heat networks

Heat and buildings strategy: Key points

On 19 October, the government released the Heat and Buildings strategy outlining how the government will tackle the decarbonisation of the built environment to help meet the UK net zero ambition. Our experts have taken a quick look at the strategy and highlighted the key points. Heating The strategy makes...

Home supply and services

Shaken, not stirred: The fate of the supply market

This Energy market perspective was taken from our Energy Spectrum publication on 4 October 2021. To find out more about a free trial to Energy Spectrum, find out more here or contact Robert on r.buckley@cornwall-insight.com. As we enter the winter 2021-22 trading season, the energy supply market remains in intense...

Home supply and services

37 suppliers remain in domestic energy market

2021 has seen 14 domestic supply market exits to date, including the most recent three companies to use the Supplier of Last Resort (SoLR) process on Wednesday 29 September 2021: Igloo Energy (0.59% market share), Symbio Energy (0.04% market share) and ENSTROGA (0.09% market share). In September alone, nine suppliers...

Net zero corporates and ESG

The stakes are higher than they seem: the current energy challenge and net zero

It has been an incredibly challenging week in the UK energy sector, and attention has rightly focussed on consumer protection, and indirectly on the state of the energy supply markets. However, it would be a mistake to believe that the ramifications of supplier failure will be limited only to this...

Home supply and services

Rocketing energy prices and failing suppliers—what is happening?

Sky high gas prices and energy suppliers going out of business have been key headlines in the news over recent weeks, but what is actually happening?  Through the COVID-19 pandemic we saw much lower gas prices, which have been surging upwards since the spring and risen rapidly through the summer, a time...

Home supply and services

The default tariff cap and the law of unintended consequences

With all eyes on the immediate challenges facing the energy supply market and the impact of the default tariff cap as a contributing factor, it is important to note that the cap for the coming winter period should not be considered in isolation and that attention will swiftly turn to...

Business supply and services

Have we given up on competition in the retail market?

“Q: How does 2pm on Wednesday sound? A: Assuming we still have a functioning energy market that'd be great”.  It’s not really what you expect to see in an email at 5pm on a Friday when trying to arrange a call. But then these are certainly not normal times. In this Energy Perspective, we will...