British Gas Losing Customers Fast

British Gas from a consultant’s point of view is great. They’re easy to deal with, have lots of staff so any of my customers that have problems, I can get the problem solved quick and painlessly. However, they do have many problems and they have done for years but considering their size and market share – they have not been bothered. Maybe it’s time they start taking notice.

In the last six months, British Gas has lost nearly 400,000 home customers. This has meant a 7% drop in profits. Not that that really has an effect on their overall profits; with that 7% drop in profits, their profits were still a colossal £516m over six months. Centrica, the company which own British Gas, have blamed the drop in customers on a “competitive environment” and the fact that long-term contracts have now become a thing of the past.

Centrica said that they expected some short-term impact on their profits due to the Brexit vote but they only expected it to be limited. Like all other companies, there is some ambiguity with regards to how much damage will be done and what will happen once we eventually leave Europe.

Centrica said earlier this month;

“However, the result creates general uncertainty which adds to challenges for UK businesses in all sectors, with implementation plans as yet unclear.”

“The UK is now a major energy importer and what happens in the European energy market will ultimately impact energy consumers in the UK. We will continue to engage with the UK Government and the European Commission as we move forward.”

Centrica also points to their decision to drop their home energy prices by 5%. They were actually the last of the ‘Big 6’ to drop their prices thus they lost a few customers to their competitors who dropped their prices earlier.

The company also said it has made some major savings by cutting their costs this year as a part of a plan to save £750m by 2020. They have managed a £141m drop in costs in the first half of this year by cutting 6,000 jobs with a further 3,000 being cut by the end of the year.

Their chief executive said:

“The first half of the year has been demanding for Centrica, but the response has been strong and I am encouraged by the progress we have made.”

“I remain confident in our ability to deliver both attractive returns and underlying cash flow growth, as we continue to implement our strategy.”