It’s no secret that there is fierce competition in Canada’s food and beverage retail sector. Increasingly, energy efficiency is recognized as a solid approach to increase profits and improve a store’s bottom line. Supermarkets, grocery and other food retail stores that have an established energy management program are aligned to put their stores in a more price-competitive position. Being aware of your store’s energy consumption and managing it wisely enables you to concentrate on sales while doing something positive for the environment.
According to NRCan’s Canmet ENERGY division, supermarkets use more energy per unit area than most commercial buildings. A large supermarket will consume 5,000 megawatt hours (MWh) of electricity per year, and there are over 5,000 such large supermarkets in Canada. Together, this represents electricity consumption of around 25 terawatt hours (TWh) per year, or the output of about three large power plants.
Refrigeration systems typically account for around 50 per cent of a supermarket’s energy costs and lighting around 25 per cent – in terms of energy consumed these figures would be slightly lower. This translates into $150,000 per year in energy costs for refrigeration in a large supermarket. To put this into context, energy costs are equivalent to roughly 1 per cent of supermarket sales. This is very significant, considering that the average net profit margin for a supermarket is also approximately 1 per cent. That means that, all other things being equal, a 10-per cent reduction in energy costs increases profits by about 10 per cent!
What is the potential for savings in Canada?
Food and beverage stores can make a significant contribution towards the energy efficiency of the Canadian building sector. The 2009 Survey of Commercial and Institutional Energy Use provides insight into the size of this sector. The opportunity to showcase leadership in this sector is great. In Canada, food and beverage stores may be broken down as follows:
- 40,403 buildings
- 8.4 per cent of the total buildings in Canada
- 3.8 per cent of commercial and institutional floor space (29.3 million m2)
- 9.8 per cent of commercial and institutional energy use (82.7 PJ)
- 2.8 GJ/m2 total energy intensity
In the U.S., over 2,300 supermarkets that have achieved a score of 75 or more using ENERGY STAR Portfolio Manager have earned the U.S. EPA ENERGY STAR label. The U.S. EPA reports that stores that have met this goal consistently use 35 per cent less energy compared to other buildings of the same size and function.
Although the ENERGY STAR label for buildings is not available in Canada, Canadian supermarkets and food stores can also achieve the same level of energy savings.
There is no doubt that grocers face many challenges: there are varying requirements to keep food items cool, frozen or heated. Customers want uniform levels of lighting and don’t want to be uncomfortable in a store that is either too warm or too cold. Energy demands are intense, and the cost of providing this energy strongly influences a store’s profitability.
Reap great savings from energy efficiency and benchmarking
The release of NRCan’s new 1-100 ENERGY STAR score for food and beverage stores will provide a powerful tool that Canadian food retailers can use to maximize the energy savings potential in their stores. There are many supermarkets and grocery stores that are already profiting from sound energy management and improving both their bottom line and corporate profile.
The distinction of most supermarkets is that they are large facilities, and utility costs represent a much bigger slice of the overhead in comparison to other retail ventures – this is particularly due to refrigeration. In an industry where profit margins are small, and the competition fierce, the U.S. EPA reports that even $1 in energy savings can translate into $59 in increased sales.In addition to demonstrating sound fiscal responsibility and increasing the bottom line, these savings also attract the over 60 per cent of consumers who have explicitly stated that they wish to make their purchases from companies that are environmentally responsible. Here are some examples of food stores that are benefitting from a vision and commitment to sound energy management.
Food Lion, an American supermarket chain, has consistently delivered on its commitment to energy efficiency by receiving the ENERGY STAR Partner of the Year Sustained Excellence Award for 10 consecutive years. They have taken a proactive approach that focuses on both equipment upgrades and in-house education. This has resulted in over 85 per cent of Food Lion’s stores receiving the ENERGY STAR label and a 30 per cent increase in efficiency across the board since 2000.
Another American retailer, Lowes Foods, through retrofitting and benchmarking five of its stores, saved enough energy to power 444 homes for one year and cut carbon dioxide emissions by nearly 10,000 tonnes per year.
Canadian grocers are also realizing energy management successes. In Saint-Pascal de Kamouraska, the IGA supermarket (a subsidiary of Sobey’s Québec), became the first LEED-certified supermarket in Canada. The store consumes 43 per cent less energy compared to Canadian standards for similar buildings, is self-sufficient for heating, and water consumption has been reduced by 47 per cent.
In 2014, the family-run independent store Kudrinko’s in Westport, Ontario received the “Greatness in Green, Outstanding Independent Award” from Progressive Grocer for its environmental efforts. Kudrinko’s competed against entries throughout North America. In addition to monitoring and tracking its energy use and refrigerant losses, Kudrinko’s implemented many energy-saving measures such as replacing inefficient equipment, increasing building envelope insulation, installing energy efficient lighting and many other retrofits before receiving the award.
For more information visit our Energy Benchmarking Roadmap. Register for one of the upcoming webinars on the new 1-100 ENERGY STAR scores for supermarkets and food stores by visiting our energy benchmarking training resources page.
Reprinted from Heads Up: Building Energy Efficiency – Volume 2, Issue 3