The energy retail market is gradually emerging from a slumber induced by the Covid pandemic and then compounded by a cost of living crisis that effectively put competition into hibernation. But with the price cap now low enough to allow suppliers to pitch under it, does this mean a new era of sustainable switching based on more than just price is finally beginning?
According to, Stuart Burnett – the lawyer turned co-chief executive of Utility Warehouse – it could well be but he sees little evidence that the market is actually ready for it.
In particular, he has little time for those claiming that the energy price cap is acting as a dampener on innovation.
“I’m a strong advocate of the need to have a real benchmark for what fair pricing is, and that’s what the price cap provides,” he insists.
He continues: “One of the challenges that is sometimes levied against it is that it means that everybody prices at the cap and there’s no competition. Well I say that’s because nobody is innovating … there isn’t a real basis for pure price-based competition unless there is innovation.”
Burnett believes there are many different ways suppliers can innovate, whether that is through bundling together different products as Utility Warehouse does or being a prepay-only provider. In the case of the former, he says bundling products can “generate a structural cost advantage” which allows the retailer to offer lower prices.
“It’s not about switching rates and price-based competition, but about innovation and encouraging and incentivising suppliers to innovate, because that ultimately is how you drive progress. Price-based competition without there being a reason for it is destructive. Price-based competition off the back of innovation can be positive but you need to drive the innovation first,” he says.
Burnett claims his company’s unique approach, as both a multi-utility and one which has taken word of mouth to new levels, means it is primed to take advantage of this lack of momentum across the energy market.
The opportunity to work across multiple vectors is one of the things that attracted Burnett to Utility Warehouse, which he joined as legal and compliance director at the start of 2016. In November 2021 he became co-chief executive alongside Andrew Lindsay.
Utility Warehouse is the trading name of Telecom Plus and came to market more than two decades ago. It provides a unique mixed offering of energy, broadband, mobile and insurance services to more than 900,000 customers. The company posted a revenue just shy of £2.5 billion for the year ended 31 March 2023, up from £967 million in 2022, with pre-tax profit up 55% to £96 million.
The business model is centred on a growing army of “partners”, who actively seek to recruit others into the ranks, with the incentive of financial rewards if they succeed. They currently number 60,000.
Burnett explains that to become a partner, customers must undergo online training and be mentored by an existing partner. He says the rewards can be significant, with active partners making on average just under £500 a month in Q1 2023.
“It’s probably the thing I’m most proud about this business is this social benefit that comes from us growing. Not only are we offering more households better value and service on their utility bills, we are also putting money into the pockets of ordinary people up and down the country … there’s a real social benefit from that,” he says.