There are some interesting comments, and good information, about hub gears.

I'll add that the 7- and 8-speed Shimano hubs are high quality. The low end on the 8-speed is pretty low, ~24", as I recall. They are serious possibilities for multi-speed bikes, even in hilly areas.

There is some friction loss in hub gears compared to deraillers, though. There's no getting around that. Some of the older English 3-speed hubs would lose ~10% of the power compared to ~1% for a properly maintained derailler drive. The Shimano hubs might be better than that, but they're not going to be worlds better.

That loss would be a deal breaker for me, but only because I sometimes want to make ~20-odd mile round trips for groceries and the like. (I live in a small town, and sometimes have to travel to get to places like Megalowmart.) If I were just making shorter trips, the hub gear penalty wouldn't bother me much. It might well be worth it to avoid all of the derailler maintenance. You can use a proper chainguard, too, which is no small consideration on a practical bicycle. (I curse many times for there being no proper chainguard in North America for a derailler bike.)

I'll mention too that the Breezer bikes are very attractive. The LBS has got a few in stock, and I'm impressed. They are not clunky machines. They are surprisingly light weight, well made bikes. The high end model has a Shimano generator hub in front, and a dedicated light. I would definitely consider one for a utility bike.

Well, I would consider it, except that I think that a touring bike is a better utility bike even than a Breezer. You can carry more stuff with full front and rear racks than with the smaller rack on a Breezer-type bike. A tourer will allow more efficient travel over longer distances, too. If you really want the hub gears, though, consider a Breezer.