Food Forum: A New Dimension in Food Retail

The food retail business is unlike any other. In some ways, it is better: while other retail businesses have to wait for their customers to wear out their shoes or styles to change before they will step foot in a store, grocery store customers are customers for life, showing up week after week, constantly refilling their baskets. 

Despite a neighborhood’s inherent need of grocery stores, owners of food retail businesses face unique challenges. The industry is very crowded, highly competitive and simply maintaining a profit is often an uphill battle. 

There are two ways to increase profit in any business: increase sales, or lower cost. Increasing sales is everyone’s preferred option, but the fact remains that there is no magic formula to doing so. By all accounts, increased sales rely on equal parts hard work and animal spirits. Lowering costs, however, is largely in the store owner’s or manager’s control. 

But with lower costs so often comes lower quality. It is a bit of conundrum really; that is unless the cost saving efforts actually increase operational efficiency and bear no ill effect whatsoever on quality or the customer experience. 

In food retail, profit margins are typically very narrow. On top of obvious expenses such as supplier payments, rent and employee salaries, there is a myriad of other expenses that are seldom examined and even more seldom controlled. 

For example, a typical food retail chain incurs more than $500K annually in operational expenses related to energy, maintenance and food loss. Refrigeration systems and associated issues make up the lion’s share of that burden. Far from a set-it-and-forget-it asset, a properly functioning refrigeration system requires vigilance against a host of potential hindrances, including: low coolant levels, over-cycling on and off of compressors, colder than necessary default settings, under-attended maintenance schedules and over-attended maintenance schedules, etc. 

With smart energy management, you can widen your margins by overcoming the energy and operational pressures that have always plagued food retailers. These pressures are not the unavoidable results of technological limitations, but of inefficiencies stemming from a lack of operational insight into the health and performance of critical machine assets. Your machines can and should work better; you just need visibility into the performance of your operation’s critical assets. 

Preventative Maintenance

Years ago, most businesses relied on a reactive maintenance model. If the air conditioning broke down or a refrigerator stopped cooling, they would be fixed. Of course, by the time they were fixed the company would have already lost out. The move to predictive maintenance was only natural, with companies saving on repair costs by trying to predict system failure before it had a chance to happen.

Today, we are seeing another shift. Prescriptive maintenance is like preventative maintenance, but with intelligence. Just imagine a small sensor placed on every circuit in your store that feeds a critical asset. By measuring a baseline electrical signature, the subject’s operational state and general health can be deduced in real time. If that signature deviates from manufacturer specifications, or even machine-specific historical benchmarks, the relevant manager will be informed of the anomaly immediately. 

According to Energy Star, the average commercial building wastes 30 percent of the energy it pays for. With refrigeration and lighting making up more than half of the energy used by food retailers, there is plenty of room for savings. 

Every dollar saved through a smart energy management system can be compared to a sales increase of $59. You know exactly how much work is involved in selling $59 worth of product, and that is a far cry from the simple installation of smart energy sensors that will find these savings for you. 

Maybe your business is suffering from off-hours electricity consumption, or from refrigeration units that are prone to breaking down or that allow the temperature to bounce back and forth. Wherever your waste is, a smart energy management solution can find it.      

Jon Rabinowitz is head of marketing at Panoramic Power.