Ahead of the Energy Council on 30 September, EuroCommerce, which represents the retail and wholesale sectors in Europe, has called for urgent support as high and rising energy costs pose a threat for many businesses.
EuroCommerce director general, Christel Delberghe stated, “Alarm bells are ringing across Europe over the massive impact of energy costs on the retail and wholesale sector, threatening the future of many businesses.
"We call upon ministers meeting on 30 September and when implementing the regulation to recognise that our sector needs urgent help. Without such aid, circumstances will put into question our sector’s ability to effectively provide the essential service on which not only consumers, but the many ecosystems in our supply chains rely daily.”
Businesses in the sector operate on low margins ranging between 1%-3%.
The quadrupling of their energy bills will now account for over 40% of their EBIDTA, which means that the narrow profit margin disappears entirely, even for larger operators.
EuroCommerce has welcomed the European Commission’s initiative to help households and businesses reduce the cost of energy.
It has also called on the EU and member states to take action to reduce systemic risk to businesses and prices of energy for final customers and introduce schemes to cushion the impact of high energy prices.
Some 20% to 50% of retailers have warned that they will go out of business in the near future without support to reduce the cumulative impact of energy costs, EuroCommerce noted.
The retail and wholesale are energy intensive sectors – in Germany consumption is as much as 35 TW/hrs annually – and account for more than some industries that are usually considered large energy users.
The sector has invested significantly in saving energy and it has the potential to reduce Europe’s dependence on imported fossil fuels.
EuroCommerce believes that access to financial support will help the sector navigate major pressures from the cost of energy, the rising cost of the products it sells, and consumers reacting to the cost-of-living crisis by cutting their expenditure.