Home Business News How pubs are battling the energy price crisis

How pubs are battling the energy price crisis

by LLB Finance Reporter
26th Jul 23 5:43 am

A Marlow-based pub has achieved over £50,000 in energy cost savings over the past year through smarter energy consumption, short-term fixed price contracts and specialist consultancy advice.

The hospitality sector is one of the industries most impacted by the surge in energy prices. Recent reports indicate that energy is the second-highest cost for hospitality venues and can account for around 10% of their turnover. 

In July 2022, The Hand & Flowers, part of The Tom Kerridge Group, and their flagship pub with two Michelin stars, were faced with the stark realisation that their energy bills were going to rise from £5000 per month to an eye-watering £35,000 per month – seven times the original cost. 

Alan Dooley, MD of The Tom Kerridge Group knew he had to act fast. He reached out to Energy & Sustainability Consultancy Advantage Utilities to see what steps he could take. Getting to work immediately, Senior Energy Consultant, Hannah Thomas, secured a short-term energy contract to cover the winter period from 1st December 2022 to 31st March 2023 and began to look at their energy usage in granular detail. The company was also entitled to the Energy Bill Relief Scheme during this period.

“Hannah and the team began by carrying out a full review of all our businesses, looking at absolutely everything – from kitchen consumption, external lighting, heating, computer usage, iPad usage, peak times of usage, the list went on,” explains Dooley. “For us as an independent operator it was a huge eye-opener to where we could save on our usage. This was a very good start and has helped kickstart a culture change in how we use our energy.”

The savings identified amounted to 27% of total energy consumption recorded over a twelve-month period, equivalent to a monetary saving of £51,175. Such savings included LED lighting, air conditioning optimisation, fridge efficiency, solar energy installation and voltage optimisation.        

“Energy purchasing has now become an integral part of our business,” adds Dooley. “We now receive a weekly report on the market, have regular meetings with Hannah on where the prices are going. We now buy energy the same way we look at our food and beer prices, it has become that important. We monitor it all the time.”

“We have heard so many horror stories on small independent businesses (like ours) struggling to plan,” he continues. “The issues are here to stay, and we need to have expert advice at hand. It is very reassuring that there is someone we can turn to, and who can advise us on the best route forward during this incredibly difficult period.”

Advantage Utilities Account Manager, Hannah Thomas, who oversaw the project said, “One of our company mantras is ‘the cheapest unit of energy is the one that you don’t consume’ and this was certainly a helpful signpost for The Hand & Flowers.

“Many of our clients don’t realise how much energy is being wasted and the financial gains that can be made by simply being more aware of how and when energy is used. For context, we first secured a fixed short-term contract for The Hand & Flowers which helped them to ride out the volatility in the marketplace.

“It ensured that they had budget certainty for the short-term but the ultimate goal was to align their contract to the start of the summer trading season, enabling The Hand & Flowers to enter into a flex framework. They are now in a flexible purchasing strategy which is not a ‘fixed’ contract as this was the most suitable and optimum type of purchasing strategy for them.” 

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