CHILLING PROSPECTS

RUSSELL SHAW

For independent retailers, meeting the refrigerants challenge could prove especially daunting. The basic issues confronting large chains and independents may be the same, but the cold economic realities of how and when to convert to a new generation of refrigerants can be particularly stark for many cash-strapped smaller retailers.

"If I converted all my six stores to HFCs today, it would cost me more than $250,000 out of pocket. With my thin margins, that would drive us into the red," said one Midwestern independent retailer, who asked not to be named.

For that reason, independent retailers and their wholesaler partners are looking particularly hard at which options can best suit their needs. The options include:

Stockpiling chlorofluorocarbons and taking preventive

steps to avoid leaks now to ride out supplies as long as possible.

Switching to intermediate hydrochlorofluorocarbons in some or all stores in the hope that the formulations are deemed acceptable substances well into the next century.

Making the move now into the relatively new, uncharted and more expensive territory of converting to state-of-the-art hydrofluorocarbons in some or all stores.

A combination of all the above.

Choosing the right path clearly is not easy, one independent retailer told SN.

"Right now the most that we see is confusion. The industry has been going in several directions. We're waiting for the different directions to stabilize," said Gene LeRoux, president of Oregon Grocery Stores, an independent based in Eugene, Ore.

In picking among these alternative solutions, independents may face some considerable obstacles that chains don't. Chief among these is the cost of retrofitting. Counting labor costs and parts, it could cost $50,000 a store to retrofit for HFCs, and about $15,000 for HCFC retrofits, industry observers estimated.

Before a decision can be made, preretrofit engineering studies must also be conducted by refrigeration consultants and contractors. Few independents have refrigerant specialists on staff, so many are turning to refrigeration experts at the wholesaler level.

Most retailers are still studying the problem, but they may be getting closer to making some firm decisions, according to independent and wholesaler executives interviewed by SN.

"We have a CFC task force in our company researching and establishing policies and procedures for our corporately owned stores. We will then issue these findings to our independent affiliates -- not telling them what to do, but more from the standpoint of 'here are our findings, you can do what you want with them,' " said Ed Bergeron, refrigeration engineer for wholesaler Nash Finch Co., Minneapolis.

Bergeron is an advocate of buying enough CFCs now to weather any eventual economic and logistical encumbrances that retrofitting will bring. "We bought two truckloads of R-502 to get us by, so we could stretch our supplies out over a five-year period. With existing hardware, we are replacing refrigerants and oils only -- not putting in new compressors," Bergeron said.

Bergeron advises independent retailers to fix leaks "but also to consider replacing refrigerants certainly by the third quarter of this year. If you have to do system conversions, do one store a quarter. That way, you could spread your capital costs of conversion out over a year or more."

"The position we are taking with our members is 'make sure your systems are tight and leakage is at a minimum,' " said Nick Magnacca, senior project engineer at Wakefern Food Corp, Elizabeth, N.J. "As you build, replace or upgrade stores, budget money for conversion to HCFCs right now so that you know the funds will be there."

Some say pinning all your hopes on stockpiling CFCs can be risky. Some predict a major trend toward stockpiling might result in scarcity, high-prices and even quasi black-market conditions.

"Look at your budget, but don't take an unnecessary chance that [CFCs] aren't going to be available. In the future there might be horror stories about how high the price of CFCs will get," said Phil Fallon, mechanical engineer at Giant Eagle, Pittsburgh.

Independent retailers stress, however, that any delay in defining a firm refrigerant policy for the future is not due to apathy. The main gremlin is cost.

"We're not being very proactive," admitted Roger Martin, vice president of operations at Prescott Farms, Hampton, N.H. "A lot of people at the independent level are being left behind because they don't have the capital expenditures available per year to upgrade their stores. Because the economy is tough in New England, [independents] are just trying to get by," he said.

Some experts say, in large part, that survival instinct will define the scope of coolant conversion by independents for the next several years.

"Some of the independents will be doing conversions, but even by the end of 1995, the small independents will be fixing leaks and stockpiling used CFCs. I don't think the independents will be out of R-502 or R-12 until 2001. If they're available, they are going to use them," said Bergeron.