The supermarket industry in the U.S. is huge – which is only natural when you consider that 328 million Americans have to eat every day. It’s estimated that Americans spent $682 billion in the nation’s 38,000+ supermarkets in 2017. But in addition to these sizable sales, supermarkets also have huge operating costs. The largest operating costs for any supermarket are product inventory, which accounts for about 75% of sales, and labor, which accounts for 10%. While energy costs represent only 2% of sales, that number masks the significance of energy in running a supermarket. After all, 2% of $682 billion is nearly $14 billion.
Keeping the shelves stocked makes it difficult for a supermarket owner to cut expenses in product inventory and labor, but energy is an area where significant savings can be achieved with relatively little effort and investment. And those savings are important to the bottom line. Profit margins for supermarkets are razor-thin, with stores registering an average net profit after taxes of only 1.1% in 2016. Because of these low profit margins, reducing energy costs can have an outsize impact on the bottom line. An EPA study estimated that a 10% reduction in energy costs for the average supermarket is equivalent to increasing net profit margins by 16%. To put it another way, every dollar saved by reducing energy use is equivalent to increasing sales by $59.
Supermarkets are the most energy-intensive sector among commercial buildings, consuming even more Btu per square foot than hospitals. The primary reason for this high energy consumption is refrigeration, which can account for more than half of all the energy used in a supermarket. Dairy, meat, produce and other perishable items must be kept chilled in both storage areas and in sales floor display cases.
While the most dramatic energy savings would be achieved by a complete overhaul of a supermarket’s refrigeration system, there are several low-cost measures that will help cut energy costs without such a sizeable capital expense. For example, de-humidification filters can be installed to control humidity and moisture build-up. Moisture causes the refrigerator’s internal temperature to rise, turning on the compressors to bring the temperature back down. De-humidification filters draw moisture from the air inside the unit, allowing the compressors to run less often and reducing electric use. These filters can also help eliminate odors and bacteria that grow in moist environments.
Doors on refrigerators, freezers and display cases should be tightly sealed to prevent warm, moist air from leaking in to the units. Door gaskets and automatic door closers should be checked regularly and repaired or replaced if they’re damaged or worn. Low-cost plastic curtain strips can be an inexpensive energy efficiency measure for walk-in refrigerators. Installing them behind the walk-in’s door lowers the amount of cooled air lost when employees walk in and out.
Refrigerated display cases present a dilemma for supermarket owners. On the one hand, the cases should offer customers a good view of the products and an easy way to grab them off the shelves. On the other hand, having completely open cases wastes a lot of energy – just imagine what your home’s electric bill would look like if you took the door off your kitchen refrigerator. One solution to this dilemma is clear plastic curtain strips that reduce the loss of cool air from the case while still providing customers with a clear view of the products and keeping them within easy reach. Additional energy savings can be realized by placing a continuous cloth or plastic cover, or “night curtain” over the cases during overnight hours, limiting the loss of cool air when the store is closed.
Lighting is the second biggest energy user in supermarkets. Upgrading to LED lighting can cut energy use by 30% over fluorescents and can reduce maintenance and replacement costs because LEDs last three to five times longer than fluorescents. A two-for-one approach to energy savings in refrigerated or frozen food display cases is the replacement of fluorescent lighting with LEDs. The fact that LEDs generate very little heat means that the lighting in the display case isn’t making the refrigeration motors work harder. Every three watts of power saved by replacing fluorescents with LEDs also saves one watt of power for air conditioning because LEDs operate at lower temperatures. This means that replacing a standard five-foot fluorescent tube which uses 60 watts with a similar-sized LED tube using 12 watts not only saves the difference between those two wattages but saves an additional 16 watts on the refrigerator motor’s electric consumption. Multiplying those wattage savings by the number of lighting tubes in a supermarket’s refrigerated and freezer cases can result in a significant cost reduction. In addition, LEDs work better in the cold than fluorescents, so installing them in refrigerator and freezer cases makes the upgrade even more beneficial. And the icing on the cake is increased customer satisfaction. A survey by the Lighting Research Center at Renssellaer Polytechnic Institute found that 86% of shoppers preferred LEDs in freezer cases to other forms of lighting.
But energy efficiency isn’t just about utility bill savings. Food safety and preservation also benefits from efficiency upgrades because precise temperature and humidity controls for frozen foods help prevent inadvertent thawing and refreezing that make frozen foods packages unattractive for shoppers (do you really want to buy ice cream in a container that’s covered in ice crystals?) or even dangerous. These precise controls also extend the shelf life of refrigerated foods and cut down on the losses that supermarkets absorb in the spoilage of perishable meat, produce and dairy items.
Efficiency upgrades can also play a role in increasing a store’s sales. Better lighting and more precise temperature and humidity control achieved through efficiency upgrades can improve the customer’s shopping experience by creating a more comfortable and welcoming atmosphere that brings more shoppers into the store and encourages them to stay longer. The directional nature of LED lighting can help draw shoppers’ attention to specific products and displays that the store owner may wish to highlight. LED lighting also brings out true colors in the presentation of food. The Color Rendering Index, or CRI, is a measure of how artificial light stacks up against natural sunlight. On a scale of 1-100, with 100 being natural sunlight, LEDs generally fall into the 80-95 range – significantly higher than fluorescent or incandescent lighting. A high CRI index is important for supermarket owners who want their apples to look truly red, their lettuce to look green and their oranges to look orange. The appearance of produce can also be made more attractive by high-efficiency motors that operate refrigeration systems. Using these motors in produce sections can help keep fruits and vegetables from drying out because they run only when needed and thus reduce airflow.
Additionally, efficiency upgrades can improve employee satisfaction and productivity by enhancing workplace comfort. A recent study by Riptide Partners showed a link between job satisfaction and adequate lighting, consistent temperatures and the workplace owner’s commitment to energy conservation. The study also found that Improving indoor air quality through efficiency measures can impact the number of sick days employees take.
The safety of shoppers and employees can be improved by energy efficiency measures that provide brighter and more directed lighting inside the store and in parking lots. Finally, energy efficiency improvements can help some types of motorized equipment last longer because they’ll run less often.
When all the financial and ancillary benefits are taken into account, there’s no question that investing in energy efficiency upgrades is the right call for supermarkets.