Going Green and Cutting Costs

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Going Green and Cutting Costs

By Arabella Lacarta, Senior Consultant, Insight Research

NEW YORK -- Asda, Walmart, Tesco, Giant Eagle and other large-scale and international operators are cutting their energy bills by at least 20 percent across the estate, and up to 70 percent in new-build stores. They are reducing costs and driving consumer traffic and loyalty with astute environmental initiatives that make good business sense and are also in tune with consumer demand for ethical, environmental and community-led points of differentiation.

But how are they doing it? Which operational sectors give the best results? What is the return-on-investment (ROI) on energy-saving equipment? Are investment levels prohibitive for the smaller scale operator?

NACS -- The Association for Convenience and Petroleum Retailing recognized this new area of green and sustainable convenience operations and raised many questions for their members. The convenience sector clearly had a lot to gain from reducing utility bills and moving away from negative green associations with fuel and fast food, but keeping up with the gains made by major international players with time, capital and resources for R&D presented a major challenge for many NACS members.

NACS commissioned its European relationship partners, Insight Research, to survey what grocery and convenience retailers were doing across Europe and North America, and develop a toolkit of tried and tested strategies and initiatives that could be used by convenience retailers.

Retailers Involved
As soon as the project was underway we saw smaller operators in the United States, Europe and elsewhere, stating cutting energy consumption is a clear win and becoming a strategic priority.

Retailers were very clear about the gains. Bob Garrity, vice president of sustainability at Giant Eagle, the U.S. supermarket and convenience store chain in the mid-Atlantic states, agreed. "Energy saving doesn’t need any justification," he said. "It’s just a slam dunk."

Tesco’s research shows more than 60 percent of consumers feel it is the responsibility of companies to lead the way in the fight against global warming. "Customers are driving us down this route," said James Dorling of Tesco. "They tell us they want to know what they can do and want to see examples of how to contribute. They feel that large companies like us have a duty to drive technologies."

Case study contributions were used from large organizations and smaller box operators, including Musgrave Ireland, Budgens, 7-Eleven, Nice N Easy, BP, Rutter’s, Giant Eagle, Quick Chek, Zarco 66, Harry Tuffin and WH Smith.

Refrigeration, Lighting and HVAC
The major factors in convenience utility bills are refrigeration, lighting and the costs of heating and cooling the store, so the toolkit concentrates heavily on these areas. The NACS Green Toolkit lays out achievable goals with projects for immediate action, for refit improvements and for long-term strategic planning and new build.

In the lighting section, the toolkit examines the return on investment (ROI) in making changes such as updating T12 fluorescent light fittings to T8 or T5, using LED lights in refrigerators and even for canopy lighting. Refrigeration looks at initiatives like new heaterless, non-condensing fridge doors, cold air recovery technology and interesting new designs that can use cold exterior air to chill cold rooms. The integration of store air conditioning/heating and refrigeration is examined with modular integrated refrigeration systems that use excess heat to heat the store. The cost savings available from automatic systems using light and temperature sensors across the store and fully integrated energy management systems are identified.

Forecourt Innovation, Store Design and New Power Sources
Forecourt canopies offer some radical design innovations and retailers are using these to cut their power bills. New build offers unique opportunities to harness natural light with skylights and light tubes and, even on an existing site, painting the roof with a white coating can cut energy bills by up to 20 percent. Green power can be expensive but the toolkit examines the ROI on micro-generation of power with solar panels and wind turbines, and identifies the most promising areas.

The toolkit also looks at how to avoid greenwashing and how to make sure environmental messaging is effective and aligned to core values. It also discusses how to market a new environmental message to consumers most effectively. It looks at how to get staff and shoppers interested and excited about new environmental opportunities and makes suggestions about where the most successful partnership opportunities are to be found.

For further information on the toolkit, contact Arabella Lacarta at [email protected] or call +44 (0) 1938 556090, or visit www.insightresearch.co.uk.

To order the toolkit, e-mail Trisha Frazier at [email protected] or call (703) 518-4291.

A graduate of the London School of Economics with a postgraduate diploma in Information Science, Arabella LaCarta has worked in research and consultancy for the last 10 years. At Insight Research, specialists in research and events for the global convenience and grocery industry, she has specialized in strategic analysis for the convenience and forecourt sectors. Arabella will present highlights from the Green Toolkit in Europe at the Insight/NACS Global Convenience Benchmarks Event Cutting Costs -- New Consumer Behaviors -Category Winners and Losers in Dublin, Ireland, March 23-26, 2009.

Industry innovators Jay Ricker, president of Indianapolis-based Ricker Oil, and Scott Hartman, president of Rutter’s Farm Stores in York, Pa., will discuss the consumer movement for sustainability and the focus on corporate responsibility in a special Convenience Store New Webcast on Thursday, Feb. 19 at 2 p.m.

The Web cast will explore whether consumers will pay more for "green" products, will they shop more often in stores that produce a smaller carbon footprint, and when retailers can expect a return on their investment on installing and implementing eco-friendly systems in stores.

These are questions every c-store owner must ask -- but one thing is certain: going green is not a fad, it’s a critical, long-term strategy that can benefit both their business and the environment.

To register for this interactive, online-only Web seminar, click here.