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Supermarket energy sales – attractive offers aren’t all that

M&S and Sainsbury's Energy bags

With only Eon left still selling door to door, energy companies have been changing the way they sell. Some are even selling in supermarkets. But are their offers as good as they sound?

Our investigation into energy companies selling in shopping centres and supermarkets found that the deals were often dressed up to look attractive, but didn’t offer the best value.

‘£125 discount’, ‘Triple Nectar points’ or ‘up to £70 of M&S vouchers’. These were the types of incentives we were offered when we were approached by energy salespeople in stores. But whilst these offers sound attractive, we calculated that the energy deals offered were still more expensive than the cheapest tariff on the market at the time.

Some energy companies send salespeople in shopping centres to sell face-to-face, either as themselves (e.g. EDF Energy and Eon) or through a partnership. Sainsbury’s Energy is a partnership between British Gas and Sainsbury’s, and M&S Energy between SSE and M&S. It means salespeople have access to these stores and are selling under a more trusted brand; that of the supermarket.

The big problem with supermarket switching

One of the problems we found is linked to the fact that when you’re out shopping you’re very unlikely to have your energy details or bills with you.

However to produce an accurate comparison, the energy company should at least have your current supplier’s name, the name of the tariff(s) you’re on, the mode of payment you use and your annual energy consumption figures.

But unless you know all of that by heart, the salespeople would use a rough estimate. And the biggest problem was that all salespeople produced quotes on the basis that the customer was on their supplier’s standard tariff. Only a small minority of salespeople even asked us if we knew what tariff we were on.

Are you saving or spending?

Using standard tariffs as a default inevitably shows a saving as they are usually expensive. But if the customer was on a cheaper deal (say a cheaper online tariff), it would result in the quoted deal being more expensive than their existing contract.

We found that we were quoted between £20 and £142 of annual savings when in fact the customers in our scenario would have been between £39 and £311 worse off.

And what’s more, we had to sign right there. Salespeople told us that this was not a problem since there would be a cooling-off period during which you could cancel. But we think you should take your time to compare deals when switching energy supplier.

One Which? member, Don Paddon, cancelled after checking the real savings when he got home:

‘I was approached in Sainsbury’s by a rep who claimed to be able to save me £240 a year and give triple Nectar points on the payments made. I signed up but once home I went to the Which? Switch site and found that my present provider, Npower, was in fact the cheapest provider I could have. I cancelled.’

Have you seen energy salespeople in your local Sainsbury’s or M&S, or other supermarkets? What did they tell you and did you sign up?

Comments
Member

Someone selling energy supply in a supermarket will be on either low basic and commission or even commission only. If you’re lucky you’ll find one who is honest, good at arithmetic and if you can advise fairly accurately your annual gas and/or electricity usage you’ll get a fair picture of any savings that might be on offer if you switch.
Sadly if any one of those three elements are missing, as will be the case most of the time, you might as well go back into the store and buy a lottery ticket.

Even comparison sites only give a general idea of potential savings upon switching because so much depends on accurate annual usage. Such is the confusion caused by the large number of different tariff formats. Standing charge or diifferent Kwh price after so many units etc etc.
The only way is to get out last years year end statement of energy usage and your calculator and work it out for yourself, or get someone good with figures to do it for you. But certainly not face to face with a salesperson in a supermarket.

I’ve done this several times (serial switcher) and my best advice is stay away from the big six and go for one of the smaller suppliers. But do the sums anyway.

Member
Gillian says:
18 February 2012

I always feel nervous about price-only comparisons. For something as vital as energy that we can’t do without and have to have local capacity to deliver it into our homes – I want to be sure that sustainability is taken into account as well as good staff practices. Will cut-price lead to better or worse investing in UK resourcing of energy and infrastructure, staffing of engineers rather than ‘suits’ and profits for overseas shareholders?