SUPERMARKET REFRIGERATION
SUPERMARKET REFRIGERATION
Store energy and profitability
Andrew Chandler, managing director of Resource Data Management (RDM) gives an overview of the food retail market.
S
upermarkets in the UK are estimated to account for more than 3% of national energy consumption, while the food chain in the UK is responsible for about 18% of the country’s total energy use.
The large store landscape is tough with brands juggling reduced profi t margins, in part due to the impact of social and political changes; and rising energy costs, owing to economic pressures such as currency value and oil prices all against a background of increasingly sharp competition between retailers, and changes in consumption habits. Poor control of heating, ventilation, cooling, refrigeration and lighting is recognised as being responsible for excessive energy consumption in many supermarkets. The Carbon Trust identifi es saving energy as one of the simplest ways for retailers to increase profi ts. Energy costs may represent a small proportion of sales turnover but, it says, reducing energy use increases margins. The Carbon Trust believes that a 20% cut in energy costs delivers the same bottom line benefi t as a 5% increase in sales revenue. By adopting a proven technological approach, used wholly or in part by many of the UK’s leading food retailers, it is expected that the industry could save between 10% and 40% of current expenditure on energy – equivalent to an increase
26 October 2017 in sales of up to 10%.
In a sector where margins can be very tight, this provides a highly attractive boost to profi tability, improved competitiveness and added fi nancial security. On the environmental front, it also signifi cantly reduces the carbon emissions and enhances green credentials. In the age of the socially conscious consumer, the importance of this market driver should not be ignored.
Scale of opportunity
There are more than 8,000 supermarkets and superstores in the UK, and there are estimated to be some 50,000 convenience stores. The majority of large stores – around 6,000 – are operated by the ‘big four’ grocery chains, Tesco, ASDA, Sainsbury’s and Morrisons, while the convenience sector is more diversifi ed, being made up of major players and independents.
Tesco is by far the largest supermarket operator overall, with almost a third of the market share, followed by ASDA and Sainsbury’s with around 17% each, and Morrisons at around 11%. Smaller operators, such as Co-op, Aldi, Waitrose, M&S, Lidl and the many regional independents, account for the remaining 25%.
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