Collapse of smaller suppliers has meant having a household name providing your energy is more reassuring.
Another energy supplier is to shut its doors, though thankfully this time it’s not because it’s going bankrupt.
Centrica, the parent firm of British Gas, is ditching its British Gas Evolve brand.
The Evolve idea centred on delivering a no-frills experience to customers, with the idea that by stripping things back it could compete with the smaller suppliers who were occupying all of the top spots on the best buy tables.
However a little over a year since the “low-cost, digital-first” Evolve was launched, it is now being canned, with the 250,000 customers simply being supplied by British Gas itself.
There won’t be any changes to their tariffs or service though, with only the name of their supplier changing.
In a note on the Evolve website, the firm says that it has “listened to our customers’ feedback” in changing the name.
Switching to small suppliers
The demise of Evolve says an awful lot about where the energy market is at today. In times past, when there was plenty of competition around, then the energy giants could look a little old-fashioned.
All too often their tariff pricing was out of step with the smaller challenger providers, while dealing with them was not always as straightforward as those tech-focused newbies.
As a result, significant numbers of households who moved tariffs opted for those on offer from smaller names.
Take Ofgem’s ‘state of the market’ report from 2019, which noted that the market share of the six biggest suppliers had dropped from 75% to 70%, meaning that small and medium suppliers had grown to account for almost a third of households.
That was a record high, with the number of households switching to new deals also reaching a new record.
Perhaps it’s no coincidence that this followed the introduction of the energy price cap, which restricted the highest sums charged on supplier’s standard tariffs.
Going out of business
Things have changed rather a lot in the last couple of years, however.
While there was a time when it made sense for British Gas to try to operate a brand that competed somewhat with the smaller suppliers, that time has certainly passed.
A succession of smaller suppliers have hit the walls in the last few months.
Last week for example we had Entice Energy and Orbit Energy ceasing business, while a bailout process was launched for Bulb Energy.
Personally, I’ve had two separate suppliers go bust in the last year or so, and while the process of being automatically moved to a new supplier has been incredibly straightforward, it has been something of a chastening experience.
I am now trapped on one of the standard tariffs ‒ the most expensive deals around ‒ with little option to move elsewhere given suppliers are not really offering new deals at prices any different to what I’m already paying.
Paying for security
For the last few years, I’ve relied on auto-switching sites to handle my energy provider for more, moving me between cheap deals from suppliers I have never really heard of.
Back when I did all of the switching myself, while I was always happy to go to a challenger, I’d tend to stick to firms I had at least heard of.
That hunt for firm’s with a reputation, and the financial strength that means they are unlikely to fold even given the strange times we live in, is only going to become stronger once switching is once again possible.
It is effectively a case of accepting paying a bit more in return for security. I don’t want to go through my supplier going bust again, and I’m pretty confident I’m not alone on that front.
The time for an Evolve-style brand is gone.
The selling point of anything British Gas does at this point is its name, not that it can launch an offshoot service with no frills designed to compete with firms that are no longer in business.
That may change again in the future, when ‒ or should that be if? ‒ the energy market settles down and we no longer see such significant price changes in the wholesale markets that make simply keeping the doors open difficult for the smaller names.
And when that happens, it may be that switchers, including me, are tempted back by the challengers promising to do things differently, and at a cheaper rate to boot.
But equally, it may take some time for the memories of these difficult few months to fade enough that people will feel comfortable taking a punt on a firm that’s far from a household name.