ENERGY SAVING
Taking control of energy use and profi t margins
Food retailing is an energy-intensive business. Supermarkets in the UK are estimated to account for more than 3% of national energy consumption and the food chain in the UK is responsible for about 18% of the country’s total energy use. Alan Herd, technical sales application manager for Resource Data Management, looks at how analysis can identify points of improvement.
T
he UK food retail market has been increasingly challenging for businesses recently. Sharp competition between
retailers, changing consumer habits, social and political changes and rising energy costs due to economic pressures such as currency value and oil prices have impacted profi t margins. Curbing energy consumption is a key strategy for food retailers to improve the bottom-line performance of the business. The Carbon Trust identifi es saving energy as one of the simplest ways for retailers to achieve higher profi ts. Energy costs may represent only a small proportion of overhead, but reducing energy use immediately increases margins without needing to increase sales. A study carried out by the Carbon Trust concluded that a 20% decrease in energy costs
34 January 2020
delivers the same bottom-line benefi t as a 5% increase in sales revenue. Adopting a proven technological approach
consisting of installing remote monitoring, incident handling and predictive maintenance software as well as an eff ective front-end control system on-site can help retailers save operating costs.
If used, it is estimated that the UK food
retail industry could save between 10-40% of current expenditure on energy, equivalent to an increase in sales of up to 10%. In a sector where margins can be very tight, this provides a signifi cant boost to profi tability, improved competitiveness and added fi nancial security. Additionally, it will lower carbon emissions of the business. With environmental considerations among businesses and
consumer demands for sustainability becoming increasingly important, this off ers a great opportunity to contribute to the eff orts to stop global warming.
The UK food retail market has been
undergoing changes in recent years that have proven challenging for some businesses. The market share of larger supermarkets is falling and smaller convenience stores are on the rise. A change in shopping habits among UK consumers has caused this shift. Many are switching from large scheduled
shopping trips to smaller, daily visits to a store on the way home from work, or are now increasingly shopping online. Where businesses are feeling negative eff ects from this trend, saving energy costs can help maintain or improve the bottom line.
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