We’ve now learnt that we are all going to be a little less well off. Ofgem confirmed that the raising of the energy price cap will push average household energy bills to £3,549 from October. To put that into context, that’s around an 80% increase on what we were paying in April this year.
I’m going to come to the impact on business and our industry specifically in a moment. But I want to start by saying that for lower-income households this is a genuine crisis point. People are stretched enough as it is – they can’t simply afford to absorb more increases. The government needs to act.
We’re doing what we can. We committed to a £1,000 cost-of-living-allowance for our non-managerial team members in June. That, however, is a short-term fix. In the long term, we need government and Ofgem to get a grip. Wholesale energy prices show no sign of falling, and that is placing many households under extreme pressure.
The flip side of this is that energy efficiency is at the top of the political and social agenda in a way that it never has been previously. This represents a massive opportunity for the window and door industry.
You may not know much about Google trends but as a simple definition, it tracks interest in a particular search term over time, scoring the interest in a particular search term out of a maximum of 100. In the last two weeks of August, searches for “replacement windows and doors” have been sitting at 100 – the highest level it has been at any point this year. The last time it was there? March, just a few days before the energy price cap was last raised in April.
Searches for “home energy efficiency” is also approaching a year-long high at 98, while “double glazing2 is also climbing. While a lot of people are simply wondering how they are going to make rent, others – those who can afford to – are exploring ways to lower their energy bills, long term.
It’s also worth reflecting for a moment on the fact that while house price inflation is slowing, the number of transactions remain at historically high levels. Seasonally adjusted figures for July, for example, put the number of residential transactions up almost 37% up on the same time in 2021 and 3.2% higher than June 2022, at more than 104,000 purchases. They are people who have bought houses in need of reservation – houses with windows that they just don’t like.
It is tough for a lot of people but there are others who have the cash in reserve to continue to spend, to continue to make home improvements. It’s about the right product offer and marketing it effectively.
In retail, very simply, it has to be about energy efficiency. If you can’t tick that box, you’re not going to get a foot in the door.
It’s also about ‘premium’, because higher-end products are those that appeal to the group in our society who have cash to spend. Our range of Sheerline doors, bi-folds, windows; Residence Collection R9 and R7; our Timeless heritage window – they deliver on energy efficiency and aesthetics. We’re also committed to supporting our customers in marketing them effectively through our dedicated customer support programme.
I don’t believe we can count on government support in the near future. Government grants for energy-efficient home improvements would be an obvious step but that is unlikely in the immediate term, given the change of leadership. So for us, for our customers and the wider industry, it’s about digging in, working that little bit harder and making sure that we maximise the opportunities that increased homeowner awareness of energy prices delivers, while also doing what we can to support our people through what is a difficult time for many.
Managing director, Listers