BRITISH GAS: Further Price Increases Dent Scores Recovery

Date Posted: 23 May 2008

Centrica, the owners of British Gas announced on the 12th May that fuel bills may rise further still due to profits being affected by the increasing cost of energy.

Energy providers have dominated the British press this year after news of price increases across the board, coupled with substancial profit increases, have affected consumer sentiment, particularly given the current financial situation of the UK.

British Gas is no exception; having announced an increase in both gas and electricity bills of an average 15% in January, followed by the company’s reported jump in annual profits of £571m in February. How then, has this impacted the brands’ scores on BrandIndex?

After a steady improvement in the brands’ scores in March and April, the latest announcement appears to have caused British Gas’ ‘Buzz’ and Value for money scores to drop; with ‘Buzz’ dropping from -25% on the 12th May to -38% on the 18th May. The brands’ Value scores (the lowest scoring indicator score for the brand), also dropped: from -34% to -42% over the same period.

If British Gas are forced to increase prices along with other energy suppliers, expect to see the brands’ scores to decrease further. If the brands can avoid this however, or if positive articles start to feature as opposed to the current negative press surrounding the sector, these brands may be able to complete one of the best recoveries seen on BrandIndex – though at present, the chances of this happening look small.

Richard Wood, BrandIndex Research Executive

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