Consumer trust faces further decline

Britons’ confidence continues to suffer as inflation is expected to hit 5% later in the year. A new survey conducted by GfK NOP indicates that consumer confidence in the UK for April 2011 dropped to its lowest level since February 2009 reflecting people’s low expectations for their own finances and also their outlook on the general economy, with increasing energy bills being a major contributing factor.

The increasing negativity in the utilities sector is reflected in Alva’s reputation analysis tool which showed a reputation score decrease for the industry from 6.54 in February to 6.43 and 6.41 in March and April respectively. It is expected that during May, the utilities sector will face a further drop in reputation as, once again, the Big Six suppliers face consumer anger over increased prices.

The industry received an additional hit when SSE brought doorstep selling into further disrepute after being found guilty of using misleading sales scripts. The company is expected to face legal consequences and even a Proceeds of Crime hearing and it is already being punished across social and mainstream media. Meanwhile, Columbia Utilities is being forced to pay nearly $3m to refund its New York customers over false promises for huge savings and other deceptive charges. Both companies face major reputational losses and are the biggest reputational fallers for this period in the EU and US by -0.29 and -0.23 points, respectively.

This article was written by Nicholas Chrysanthou, energy consultant analyst at Alva and released in full on Energy Business Review.