Question

How do utilities approach grocery store chains to promote efficiency, and do some stores retain inefficient practices out of concern for the customer experience?

Answer

In the grocery sector, refrigeration and lighting represent about 65 percent of total energy use, making these systems the best targets for energy savings. Many utilities have targeted grocery store chains at either the facility or corporate level through Energy Smart Grocer (CleaResult) programs and other commercial efficiency programs. E Source resources on grocery store energy use include a Supermarkets and Grocery Stores Sector Snapshot, E Source Business Energy Advisor (a library of energy-efficiency information in commercial and industrial facilities that utilities can make available on their websites), and the Energy AdVision database of more than 3,000 utility marketing and advertising campaigns.

Working with Grocery Store Chains

Supermarkets operate on a razor-thin profit margin, and many stores, particularly independent stores and small chains, do not have a dedicated energy manager. Electric and gas utilities will therefore get the best results when they make energy-efficiency measures as easy as possible. Keeping in mind a few distinct needs and desires of supermarkets will help utility account managers immensely as they build relationships. Chief among these is the desire to retain control of equipment, work only with proven products and vendors, and count on a reliable, trustworthy contact person or group within the utility.

In some cases it may be necessary to reach out to a chain’s regional or national energy officer who can often institute sweeping, top-down efficiency measures. On the other hand, independent stores and small chains are particularly difficult to reach because they don’t generally have somebody in charge of efficiency or energy issues.

Grocery stores also make good candidates for commercial and industrial demand-response (DR) programs primarily because energy costs are one of the highest expenses for grocery facilities. For DR programs, the ideal candidates are chain grocery stores because utilities or energy service providers can often deal with one point of contact, which can simplify DR contracts.

Energy-Efficiency Programs

Energy Smart Grocer, offered by CleaResult, advertises its partnership with several utilities to help grocery stores and other participating businesses lower their energy costs through high-efficiency upgrades. These programs offer no-cost energy audits, expert recommendations on energy-efficient equipment upgrades, and cash rebates to offset the up-front costs of those upgrades.

According to the program website, participating utilities include Pacific Gas and Electric, National Grid, Avista, Central Lincoln PUD, Clark Public Utilities, Chelan PUD, Grant PUD, Lakeview Light and Power, Snohomish County PUD, Tacoma Power, and Puget Sound Energy. For each utility region, the website provides case studies, measure incentive details, and application materials.

Grocery stores are also commonly targeted as a part of a commercial refrigeration program. For example, the Commercial Refrigeration Efficiency program from Xcel Energy is available to grocery stores, restaurants, liquor stores, and convenience stores. The program provides a free, no obligation refrigeration assessment performed by Franklin Energy as well as prescriptive rebates.

Finally, it’s important to remember that supermarkets remodel an average of once every five years. The planning stage of new construction or renovation projects represents the largest opportunity for a utility to initiate a long-term working relationship with grocery stores. From an energy provider’s perspective, the frequent remodeling in stores presents a good opportunity to work with stores in adopting new energy-saving technologies or to squeeze more savings out of existing systems through recommissioning.

Utility Marketing Campaign Example

In 2014 Duke Energy launched a creative marketing campaign designed to target corporate decision-makers and to promote LED lighting in the supermarket industry. The print and online ads featured a variety of fruits and vegetables to create an effective image—using something simple that customers deal with every day. Ads focused on spoilage and shelf life of produce, maintenance needs, technology advantages, and energy cost. Duke Energy reported it saw a 50-percent increase in program participation for the grocery and convenience store segment after ad placement (Figure 1).

FIGURE 1: Orange You Ready? and Cool Lights, Hot Peppers

Duke Energy launched an ad campaign for grocery stores in 2014.
Orange You Ready? and Cool Lights, Hot Peppers

Orange You Ready? and Cool Lights, Hot Peppers

Energy-Efficient Measures for the Grocery Sector

Grocery stores in the US use an average of 52.5 kilowatt-hours of electricity and 38,000 Btu of natural gas per square foot annually. Refrigeration and lighting represent about 65 percent of total use, making these systems the best targets for energy savings.

Myriad technologies are available to make supermarkets more energy-efficient. The latest developments include a shift to LED lighting in a number of applications, a renewed emphasis on recommissioning, and high-efficiency cooking appliances for the kitchen or bakeries. Some stores have even begun to deploy solar electric systems, on-site cogeneration plants, and daylighting systems that transmit light via fiber optics.

Despite the wide variety of measures available, E Source recommends that utilities start by making it easier for those in the food sales industry to adopt efficiency measures by minimizing up-front costs and exploring the technologies and strategies with the most rapid payback first. Measures with a simple payback of more than three years are not attractive to most stores, particularly independent grocers.

Because they generally require less upkeep and are often easier to understand by those outside the energy profession, technologies such as LED exit signs, night curtains, and high-efficiency kitchen appliances are more likely to be embraced early. The aforementioned Commercial Refrigeration Efficiency program lists prescriptive rebate amounts for a variety of measures—including anti-sweat heater controls, night curtains for open coolers, and LED reach-in case lighting.

Energy-Efficiency Impacts on Customers

A number of energy-efficiency technologies and practices are available that grocery stores can adopt to significantly reduce consumption, increase customer satisfaction, and boost the bottom line. But it’s important for utilities to keep all of these priorities in mind when working with grocery stores.

Although refrigerator/freezer covers are a big energy-efficiency opportunity for the grocery sector, this measure could negatively affect store customers. With open refrigeration cases, stores commonly provide additional space heating to keep customers comfortable—but at the expense of higher facility energy consumption.

Additional Resources

Grocery Stores Are Stocking Efficiency, Alliance to Save Energy blog, provides a look at how grocery stores are working to improve energy management.