Reducer’s annual business spending and supplier review was published this week, showing that UK businesses will miss out on £7.6Bn of savings in 2021 due to low rates of switching.
Our analysis indicates that SMEs could be making big savings on their core business services such as card payments, water and telecoms and broadband. Businesses that buy all eight services Reducer quote on, could save an average of £4,922 a year by switching suppliers. Across all UK businesses this amounts to £7.6Bn of savings.
The scale of the results were no surprise to Reducer CEO, Joe Gallard, who wrote “UK businesses who don’t shop around consistently pay the highest prices. Comparing prices can take just a few minutes and save a business thousands.”
The most productive area for cost management action was card payment processing, with potential savings of £2.4Bn. Businesses accepting card payments could save on average £1,427 a year. Warnings about pricing practices in the market are serious enough that the payment systems regulator is currently investigating the industry.
“The rate at which businesses take payments by card is increasing fast due to Covid, and so are the fees they pay to their terminal providers. Businesses who haven’t compared pricing in the last year can likely save.” said Gallard.
We also found that businesses could save a total of £1.9B a year through switching their electricity and gas providers. Our energy price analysis showed that businesses who are out of contract pay one third more than those that are in contract.
SMEs could also be saving over £1B in business telecoms and broadband, an industry which BT currently dominates with over 50% market share. BT customers have announced a class action lawsuit to pursue compensation for historic overcharging.
A lack of switching in other business markets means there are potential annual savings of almost £1B in mobile phone contracts, £561M in waste collection, £130M in water and £708M by using fuel cards.