Understanding household switching behavior in the retail electricity market

•This paper investigates the barriers for electricity supplier switching in Denmark.•Four switching barriers were identified.•Relationship management and economic benefits are critical for consumer switching.•Three consumer segments for electricity supplier switching were identified.

Deregulation of the Danish retail electricity market nearly a decade ago has produced little consumer switching among suppliers or renegotiation of supplier service contracts. From an energy policy perspective, a certain amount of supplier switching is an important indicator of the success of market deregulation. This argues that poor relationship management and a lack of economic benefits are two critical barriers to consumer switching. Latent class analysis indicates that only 11.4% of consumers are non-switchers, whereas 41.1% can be considered potential switchers and approximately one-half (47.5%) can be considered apathetic consumers. We also discuss the managerial implications for both electricity suppliers and policy makers.