Managing Energy Costs in Grocery Stores

Groceries

Grocery stores in the US use an average of 52.5 kilowatt-hours (kWh) of electricity and 38,000 Btu of natural gas per square foot annually. In a typical grocery, refrigeration and lighting represent about 65 percent of total use (Figure 1), making these systems the best targets for energy savings. Energy costs can account for up to 15 percent of a grocery store’s operating budget. Because grocery stores’ profit margins are so thin—on the order of 1 percent—every dollar in energy savings is equivalent to increasing sales by $59.

Average energy use data

Figure 1: Energy consumption by end use
In grocery stores, refrigeration and lighting are the bulk end uses for electricity (A); space heating and cooking dominate natural gas use (B).
Grocery store energy consumption by end use
Top technology uses

You’ll be better able to manage your store’s energy costs if you understand how you’re charged for energy. Most utilities charge commercial buildings for their natural gas based on the amount of energy delivered. Electricity, on the other hand, can be charged based on two measures—consumption and demand (Figure 2). The consumption component of the bill is based on how much electricity, in kWh, the building consumes during a month. The demand component is the peak demand, in kilowatts (kW), occurring within the month or, for some utilities, during the previous 12 months. Monthly demand charges can range from a few dollars per kW to upwards of $20/kW. Peak demand can be a considerable percentage of your bill, so care should be taken to reduce it whenever possible. As you read these energy cost management recommendations, keep in mind how each one will affect both your consumption and your demand.

Figure 2: Diagram of a hypothetical daily load shape
Energy-efficiency measures reduce consumption and lower monthly peak demand charges.
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Content last reviewed: 
09/19/2016