Whitbread and Kwik Fit seize opportunity of water retail competition
Hospitality giant Whitbread Group and vehicle servicing chain Kwik Fit are among the first wave of companies to capitalise on the newly-opened water retail market in an effort to improve efficiency and drive down costs.
Premier Inn and Costa Coffee owner Whitbread has applied for a licence to supply its own water retail services for all of its brands in England, while Kwik Fit has agreed a deal with newly-formed water retail supplier Water Plus covering all 831 of the vehicle specialist's sites across Scotland and England.
Whitbread becomes the second business water customer to seek to supply its own water retail services in the new market, following pub retailer and brewer Greene King which applied for a self-supply licence earlier in the year.
The hospitality group has applied to Ofwat for a water supply and sewerage licence with a retail authorisation limited to self-supply, which it said would “enable it to build on efficiency works already undertaken, whilst driving cost and consumption control in the next phase of its water management strategy”.
In addition, the company said it hopes that being an active participant in the market will “drive further innovation” and provide a direct customer voice in MOSL discussions.
In order to facilitate this application, Whitbread has entered a partnership agreement with specialist water management company Waterscan to take on the role and responsibilities for the retail functions, including meter reading, central market operating system transactions, wholesaler management, paying water and sewerage charges through the settlement process, and finding further water efficiency savings.
Whitbread has 1,081 supply points in England. As a self-supply licensee, the company will pay wholesale prices; not pay retail margin added by suppliers in the open water market; become a market participant including membership of MOSL with voting rights and the ability to directly influence the market; and be able to supply water services to multiple sites for its business.
In February, Earls Gate Water – a subsidiary of chemical company CalaChem – became the first non-household water customer in Scotland to apply for such a licence. The company partnered with Scottish retailer Everflow, which will take on the responsibilities for the retail functions for a much-reduced charge in comparison to regular retail services.
Kwik Fit's supplier switch
Meanwhile, Kwik Fit's deal with Water Plus - the largest business water retailer in England - is worth £650,000 a year and will cover all 831 Kwik Fit and Stapleton’s Tyre Services sites in the UK, which are owned by parent company European Tyre Enterprises. This is made up of 83 sites in Scotland and 748 sites across England.
The deal is believed to be the largest switch by number of sites for any water retailer prior to the water market in England opening to competition on 1 April.
European Tyre Enterprises facilities manager Nigel Janes said: “The freedom to choose a single water company has created a range of benefits for our business, including cost and efficiency savings, as well as consolidated billing across most of the estate. The cost savings and reduced payment processing and administration time provided by this deal ticked all the boxes for us.”
Water Plus corporate director Tony McHardy added: “Businesses of all sizes should be thinking about how they can benefit from the changes that were introduced on 1 April, including what they want from a retailer.
"But before they rush into choosing a retailer, it is important to carry out due diligence to ensure the potential supplier has the financial standing, expertise and service offering that’s right for you and your business. Get a clear view on your current spend and ask suppliers to quote on a standardised basis so you can easily compare offers.
“The benefits of this deal with European Tyre Enterprises for their sites demonstrates what other companies can get from switching.”
Luke Nicholls & Lois Vallely
The information used in this article was sourced from edie's sister title, Utility Week
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