When it comes to grocery store profitability, we often focus on the obvious concerns — reducing spoilage, preventing shoplifting, and setting the right prices.
But there’s one profit leak that’s all too easy to overlook: your utility bills.
In this blog, we’ll explore why grocery stores have such high utility costs, plus eight steps to bring them down and protect your bottom line.
Why Are Grocery Store Utility Costs So High?
Running a grocery store requires a huge amount of energy.
Unlike other retailers, you can’t shut everything down at the end of the day. Your refrigerators and freezers hum around the clock to keep perishables safe and fresh — contributing to 40% of your utility bill.
Grocery stores often have extended hours compared to clothing boutiques or hardware stores, driving your utility costs even higher. Your lights and HVAC system are almost always on to keep customers comfortable from open to close — making up 23% and 24% of your energy consumption, respectively.
In short, reducing your refrigeration, lighting, and HVAC costs should be your top priorities when it comes to grocery store profitability. Let’s look at eight ways to keep these systems working effectively and efficiently.
1. Invest in Modern Refrigerators and Freezers
Commercial refrigerators and freezers have an average lifespan of 10 to 15 years. If your equipment is older than this, it could be costing you more than you realize.
Outdated refrigerators and freezers lack modern efficiency features, use more power to maintain the same temperatures, and require more repairs.
The EPA recommends updating to modern, ENERGY STAR-certified appliances instead.
Investing in new equipment is a significant expense, but consider the total cost of ownership rather than the sticker price when shopping for modern refrigerators and freezers. You can take advantage of rebates, file for tax credits, and look forward to lower utility bills when you purchase ENERGY STAR-certified equipment.
Over time, you’ll save $430 in utility costs for each glass door refrigerator and $980 for each glass door freezer you replace.
Resource: ENERGY STAR Commercial Refrigerator and Freezer Product Finder
2. Upgrade to LED In-Store and Display Case Lighting
Energy experts also recommend switching to modern LED, ENERGY STAR-certified lighting. This is because LED lights:
- Use less energy than incandescent and fluorescent bulbs.
- Last longer than incandescent and fluorescent bulbs.
- Generate less heat than their counterparts, reducing your HVAC system’s workload.
While your overhead lights are the biggest contributor to your utility bills, start by replacing your display case lighting — especially in perishable and refrigerated departments.
The excess heat generated by incandescent or fluorescent bulbs makes your refrigeration equipment work harder to maintain proper temperatures. Plus, it can lead to early spoilage when produce, meat, and dairy products get too warm.
3. Prioritize Equipment Maintenance
When was the last time you had your refrigeration and HVAC systems serviced? Neglecting your maintenance schedule can lead to subtle energy leaks and drive up your energy and repair costs.
If it’s been a while, here are some maintenance tasks to take care of:
- Clean your refrigerator and freezer coils: This should be done at least annually, but commercial refrigeration experts recommend a 60 to 90-day schedule for cleaning.
- Check your door seals: Cracked or loose gaskets let cold air seep out of your refrigerators and freezers, increasing energy costs and potentially causing food safety issues. Train your staff to check door seals for air leaks as they restock your coolers.
- Schedule HVAC maintenance: We recommend scheduling an HVAC system tune-up at least annually — especially before major temperature fluctuations. Your HVAC technician should calibrate your temperature sensors and catch minor problems before they drive up your heating and cooling expenses.
Well-maintained systems last longer and use less energy — reducing your short-term utility costs and long-term equipment expenses.
4. Use Display Case Shields
Open display cases are a must-have in your meat, seafood, and cheese departments — but they’re notoriously inefficient, running up your utility costs.
Display case shields (often called night covers or case curtains) solve this problem. These insulated covers keep cold temperatures in during nonbusiness hours while allowing for easy browsing during the daytime.
These covers are a simple, affordable solution to high grocery store utility costs, especially during warmer months.
5. Understand Food Safety and Temperature Requirements
Often, grocers keep their refrigerators and freezers set to the lowest temperatures due to food safety concerns, but this can lead to unnecessarily high grocery store utility costs.
That’s why we recommend researching the USDA’s actual guidelines for safe food storage. They recommend setting refrigerators to 40 degrees Fahrenheit or below, and freezers to 0 degrees Fahrenheit or below.
However, most units’ default temperature is five degrees below these guidelines, leading to higher energy bills.
Instead of trusting these low temperature settings to keep perishables safe, consider investing in in-case temperature monitors. This technology constantly monitors the temperature inside of your refrigerators, freezers, and display cases — alerting you when it drops below a safe point.
Related Read: 7 Supermarket Food Safety Best Practices
6. Plan for Seasonal Fluctuations
Grocery store utility costs can vary wildly depending on your local climate and seasonal temperature fluctuations. For example, you’ll spend more on heating and less on refrigeration during colder months, and more on cooling and refrigeration during the summer.
If you don’t plan for these fluctuations, you’ll have a cash flow crunch on your hands when your utility bill arrives. Here’s how to prepare:
- Check your historical utility bills, and make sure you have a buffer in your budget to handle summer and winter highs.
- Schedule HVAC maintenance before temperatures creep up or down.
- Adjust your in-store temperatures up a few degrees during the summer and down a few degrees during the winter to reduce heating and cooling costs.
Understanding how your grocery store’s utility costs will change throughout the year will help you stick to a maintenance schedule and protect your bottom line.
7. Invest in a Programmable Thermostat
Is your store’s thermostat set to the same temperature 24/7? If so, you’re wasting energy and money keeping an empty store comfortable.
A programmable, smart thermostat is an affordable upgrade that can save you time and money.
Instead of manually adjusting your grocery store’s temperature, you can schedule your thermostat to reduce heating or cooling efforts during nonbusiness hours — and return to comfortable temperatures before customers start arriving for the day.
This approach could cut your heating and cooling costs by up to 10%!
8. Unplug Equipment When Not in Use
Do you manage a busy deli or butcher counter? It takes heavy equipment to keep these departments running — including commercial deli scales, slicers, and grinders.
If you leave these appliances plugged in overnight, they’ll continue to draw small amounts of power. Over time, this leads to higher utility bills.
Unplugging these appliances at the end of the day takes seconds, but it could shave hundreds of dollars off your annual energy costs. Train your deli and meat department team members to turn these tools off and unplug them before clocking out.
Related Read: Best Deli Meat Slicer for Grocery Stores: 4 Options
Run Your Grocery Store More Profitably With IT Retail
Looking for more ways to boost your grocery store’s profits? Upgrading your point of sale (POS) system can make a big difference.
A modern POS solution specifically designed for grocery stores helps you tackle your biggest challenges — from inventory management to marketing. IT Retail, our all-in-one system, comes with features like:
- Perishable, weight-based inventory tracking
- Vendor management and integrated purchase orders
- A built-in customer loyalty program
- E-commerce integration
- Flexible self-checkout functionality
- AI-powered reporting and analytics
See IT Retail in action and connect with one of our grocery industry experts by scheduling your free demo today.
by Margaret Thacker
by Luke Henry