Thirteen Ways to Improve Profitability in 2013

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Thirteen Ways to Improve Profitability in 2013

By Jay Fiske, Powerhouse Dynamics - 06/14/2013

Did you know that if you cut utilities by just $200 a month, you’ll have an additional $2,400 annually in pure profit? If you operate on an 8-percent margin, you would have to bring in $12,000 in additional revenue to reap that same profit.

According to the Environmental Protection Agency’s ENERGY STAR program, the typical convenience store uses about 52.5 kilowatt hours per square foot per year. Not surprisingly, refrigeration accounts for the largest slice of that pie at 38 percent, followed closely by heating, ventilation and air conditioning coming in at 28 percent, and another 23 percent goes to lighting.

The following are some free or inexpensive strategies that can easily generate that $200 monthly savings or more:

1. Benchmarking. Know your starting point. If, like many of us, your energy, water and sewer bills are virtually impossible to decipher, contact your local utility and they will be happy to help. If you have more than one store, you’ll want to benchmark all of them to optimize savings and compare progress and statistics across the board.

2. Energy audit. This is another area where your local utility may be able to help. If not, there’s a superb self-audit tool developed by the Food Service Technology Center. While developed primarily for restaurants, all of the areas pertinent to convenience stores are also included.

3. Employees on the front lines. Gather your team together and discuss why the energy-saving mission is as important to them as it is to you. Brainstorm conservation ideas, set goals, share progress and celebrate victories. Small incentives like tickets to local attractions or gift cards are also helpful in showing your employees their efforts are important and valued.

4. Startup/shut down schedules. Schedule equipment usage just like you schedule employees. It is the backbone of your program to control energy use, providing clear operational direction for employees that will save energy and maintain equipment to maximize lifecycles. These schedules are invaluable in keeping your efforts on track.

5. Equipment maintenance. Just like your car, when equipment is well maintained, it runs better, uses less energy/fuel and lasts years longer. However, when you’re busy with the day-to-day pressures of running a business, it’s easy to let maintenance slide. If you schedule it, you’ll do it. Also, schedule regular service (at least annually) with experts who can "tune up" your equipment and make sure it’s in good repair.

6. Refrigeration, the energy vampire. It’s no wonder refrigeration accounts for more than half of your energy bill. Starting with the walk-in cooler and freezer in your storeroom and then adding in the merchandising refrigerators and freezers, ice machines and drink machines, that’s a lot of refrigeration, which means the savings can be sizable, too. For your ice machines, install a timer to shift ice production to nighttime, off-peak hours and make enough to last the next day. Energy is much less expensive in the overnight hours. For your walk-ins and merchandising coolers, strip curtains can reduce outside air infiltration by up to 75 percent. Make sure doors are properly aligned, automatic closers are fully operational, and gaskets are in good repair. Track performance to monitor your results and also to uncover surges in energy consumption that may be a sign of impending equipment failure.

7. Lighting. Small investments can yield big benefits in this area. Daylight is the most cost effective and desirable light of all, so lasso its benefits wherever possible, including windows, doors and skylights. Replace incandescent lights with compact fluorescent lamps wherever possible. Today, there is a growing array of options that go far beyond the classic coil shape. Replace old-style T12 tube fluorescents with smaller, more efficient T8s or T5s, getting the same amount of light while reducing the electricity load. LEDs are a perfect fit for refrigerated display cases as they not only save lighting energy, but they also save on refrigeration costs because they generate little heat. Use lighting only when needed, utilizing timers and occupancy sensors.

8. Heating and air conditioning. Set thermostats to 68 degrees Fahrenheit when it’s cold out and consider dialing it back another 10 degrees when you’re closed. Conversely, when the weather is hot, set thermostats at 78 degrees and consider dialing it up another 10 degrees to 88 degrees when you’re closed. Use inexpensive fans to optimize cooling. Check regularly to make sure filters are clean and when in doubt, swap them out. Schedule professional maintenance annually.

9. Water. The cost of water is rapidly escalating with some cities reporting a threefold rise over the last decade, so conservation is increasingly important to your bottom line. Install low-flow aerators on hand sinks. Replace old toilets with high-efficiency, pressure-assisted models and go with low-flow or waterless urinals. For areas generally cleaned with a hose, consider a water broom, which is more effective and uses less water. Check regularly for leaks and repair them promptly.

10. Time of use (TOU) pricing. When the demand for energy is highest, generally 12-6 p.m., the cost per kilowatt hour is higher than during the late night and early morning hours, so get out your schedule and shift as much usage to off-peak hours as possible. Check with your local utility to see what their TOU parameters are and schedule accordingly.

11. Demand charges. Imagine opening your electricity bill and finding it’s $1,000 more than last month, even though usage was the same. This is caused by what utilities call "demand charges" that are based on your highest rate of usage or energy spike in a 15- or 30-minute timeframe – any time of the day or night. These monthly surcharges can amount to $20 or more per kilowatt. Even scarier, some utilities charge what is known as "full ratchet" demand rates that are based on the peak demand at any time during the year and retroactively charged for every month of that year. To tame the beast, stagger your startup schedule so you ramp up energy usage more gradually and avoid that demand spike. A digital demand controller can also help control the operation of water heating, air conditioning, electric space-heating units and refrigeration equipment.

12. Resources. Energy technology is changing rapidly, so it’s important to keep abreast of new technologies and developments. A list of non-commercial resources can be found at under the Resources tab. And don’t forget to visit your local utilities’ websites where you can learn about programs and rebates that can help you achieve your energy management goals.

13. Energy management. By utilizing these tips, you can significantly reduce your energy use, but it does take a concerted and continued effort.

Jay Fiske is vice president of business development for Powerhouse Dynamics, developer of the eMonitor energy, asset and water management platform. He is responsible for leading the company’s overall sales and marketing strategy, developing and growing market channels, and establishing strategic partnerships. He can be reached at [email protected]

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.