Consumer trust in business May 2022

Summary

• Trust in the food / groceries and energy industries has decreased to at or below pre-pandemic levels, having made significant gains in trust early on in the pandemic.
• Trust in the energy industry has dropped dramatically to -21 from a high of +23 a year ago
• Consumers who lack trust in the energy industry cited rising prices and a perception of the prioritisation of profits over people as reasons for their lack of trust

You can view more data and articles from our monthly tracker survey on our dedicated Consumer Insight Tracker page.

Trust in the energy industry has dropped dramatically

During the covid-19 crisis and resulting lockdowns, we reported an increase in consumer trust in sectors providing essential services like food and groceries, gas and electricity, banking and broadband. The airlines and holiday operators sector experienced the opposite effect, experiencing a significant drop in trust amid significant delays in companies providing refunds for cancelled flights.  

One of the key questions thrown up by these changes in consumer trust was whether they would last, or whether trust would return to pre-pandemic levels as the initial impacts of the pandemic waned. Two years on, with all Covid-19 restrictions removed, the answer to that question differs between sectors. 

Trust in the food/groceries sector, though still higher than other sectors, has fallen sharply over the past year. 56% of consumers said they trust the food/groceries sector to act in their best interests in May 2022, whilst 11% said they don’t trust them very much or at all, giving a net trust level of +45. This is significantly lower than the +68 seen in May 2020. 

The gas and electricity industry, however, has experienced the largest drop in trust. Net trust has fallen from +23 a year ago to -21 now. This is not just below the elevated levels of trust seen in the pandemic, but also considerably lower than pre-pandemic levels. 

However, the banking and broadband / home phone sectors have so far managed to maintain higher levels of trust than before the pandemic.

Lower trust in energy companies is related to rising bills

The reduction in trust in the energy industry over the past twelve months has coincided with significant rises in energy price rises for households. Some suppliers have gone bust during this time, but for many consumers their lack of trust centres around a perceived prioritisation of profit, especially in the context of the cost of living crisis.

"I don't believe they are acting reasonably in the current financial climate. They could be charging customers much less whilst still making huge profits"

"They only want to make money for their shareholders and don't care about their customers"

"They only care about profits. They say warm words about caring for people, but they are not convincing to me"

More specifically, many consumers mentioned the amount of profits made by energy companies, with some referencing recent announcements of ‘record’ profits by oil and gas companies.

"They continue to make record profits even as millions suffer a reduction in living standards brought on mainly by the prices of their "products""

  "They are raising people's bills and plunging thousands of people into poverty, whilst making record profits"

Some consumers had concerns about the cost of their energy direct debit

Almost a fifth of our sample (18%) use a prepayment meter for their home energy and these customers have greater trust in the gas and electricity sector (-11) than those who pay in other ways (-24). 

This higher level of trust is despite prepayment meters being more common among low income households, and those with pre-payment meters being more likely to report experiencing financial difficulties. Seven in ten of those with a prepayment meter reported having made adjustments to cover their essential spending in the last month, compared to 53% of those without a prepayment meter. 

There is evidence that lack of trust for some is related to direct debits, with several consumers suggesting that the system is beneficial to the energy company and not the customer.

"Their Direct Debit system is always set too high to maximise their profits"

 "Energy companies have a tradition of increasing their customers' monthly direct debits for energy supply far in excess of that required to service the usage costs" 

"I now understand why I was bribed to pay by direct debit - they can now raise the payments as often and by as much as they like…"

Conclusion

For industries at the forefront of the cost of living crisis, the increase in consumer trust engendered by the pandemic has now dissipated. Trust in the gas and electricity sector has been particularly badly hit with many consumers having a perception of the industry as making unreasonable profits at a time when price rises are putting major pressure on households.