Retailers need to save money to make money

Retailers are using energy efficiency measures to make savings that compensate for narrow profit margins. Photograph: Alamy
The spike in oil prices undoubtedly has piqued consumers' interest in energy-efficient products. When they visit retailers to make such purchases, however, the venues in which they shop are notorious for their energy waste. Lights are often left on 24 hours a day; refrigerators do a good of a job chilling shoppers as well as products; and packaging is often excessive. Furthermore, most consumers simply do not have an appreciation for how much energy is used transporting products from factory to warehouse to store. Yet, as the retail sector becomes even more competitive, thin margins make it incumbent on these companies to invest in initiatives that can both reduce energy consumption and maximise profits.
Walmart has won plenty of recognition for its energy efficiency initiatives. The world's largest retailer's trucking fleet delivered 77 million more cases in 2009 while driving 100 million less miles (161 million kilometres) in 2008. More stores boast everything from white roofs (which reflect sunlight), LED lighting installations, and additional energy-saving features that are specific to local climate conditions. Walmart's success, however, has not gone unnoticed by its competitors.
Minnesota-based Target also has aggressively worked on reducing its carbon footprint. Like Walmart, the chain partners with the US government's "Energy Star" coalition, and 150 of Target's stores and facilities have met the program's strict standards for energy efficiency. Low-wattage light fixtures illuminate most stores' floors, and enclosed refrigerated cases have sensors that only light them up when shoppers traipse by them. In addition, Target reduces its overall energy consumption by boosting recycling efforts at stores, which decreases the amount of waste sent to landfill. Meanwhile, at its headquarters, the central office has done its share to save electricity by installing an automated system that nudges computers into standby mode after business hours.
Just as Walmart's focuses on energy efficiency in its stores abroad, European retail chains with extensive global operations work on reducing their utility bills, too. Ahold, the Dutch conglomerate that operates both the omnipresent Albert Heijn in the Netherlands and Giant supermarkets along America's east coast, has incrementally reduced its CO2 emissions per square metre of sales area in the last few years. Design is a large part of Ahold's energy efficiency agenda. At Albert Heijn stores, integrated heating and cooling systems use wasted energy from cooling systems to heat the stores, eliminating the need for natural gas for heat. Across the pond, Ahold removed many unnecessary lighting fixtures in its Giant and Stop & Shop stores, reducing energy waste. Other stores benefit from daylight harvesting, a system in which photosensors reduce light fixtures' illuminance during daylight hours, which not only make the stores appear more airy, but reduces energy consumption. Finally, Ahold has given its stores the flexibility needed to experiment with alternative energy systems, from fuel cells to solar arrays to the purchase of renewable energy credits in places where renewable energy technologies are not feasible.
The investment in energy efficiency goals is not cheap. France-based Carrefour, for example, spends 30M euros (US$42.3M or GDP£26.4M) annually on energy efficiency programs, a tiny sum compared to its worldwide revenues (90 billion euros) but 3% of its net profit. But just as making small changes within a home can reduce consumers' energy bills, retailers' can reap sizeable dividends by attaching freezer doors, streamlining trucking fleets' delivery routes, and installing cost-effective lighting systems. Automation also can add to the bottom line by the quick detection of refrigerant leaks and shutting down information and communication systems when they are not needed.
While solar panel and wind turbine installations make for great public relations campaigns, they are at a pilot stage. Not only is this large equipment expensive to install, but retail stores face numerous constraints when they attempt to do so, including the fact that they often lease, not own, the land and buildings on which the equipment operates. With their vendors already supplying them with consumer products at the thinnest of margins, retailers will continue to invest in energy efficiency programs and experiment with renewable energy pilot projects. Cutting energy use is not only about good public relations, but – while economies are still weak and as energy prices are on the rise – about staying competitive.
Source http://www.guardian.co.uk/