Over and above the inflation caused by the war in Ukraine, retailers are stepping up initiatives to make energy a profitable line item in their P&L. How have they managed to reduce electricity consumption in 2022, and by how much? With the development of shaded areas, can energy become a profitable business unit? mind Retail interviewed a dozen retailers to find out their strategies.
In the retail sector, the average electricity bill before the Ukraine crisis ranged from €20,000 a year for a specialist store, €80,000 a year for a supermarket and €500,000 a year for a hypermarket. “Before the war in Ukraine, energy was already the 2nd biggest cost for retailers. It was already colossal. Now, at the end of 2022, retailers have found themselves with energy bills that have doubled, eating into between 30% and 35% of net profit”, explained Yannick Franc, Partner at Deloitte. “With the rise in energy costs, controlling consumption has become a much higher priority for Board”.
Leroy Merlin, Lidl: electricity consumption at -15% and -10% in 2022
Faced with the consequences of the war in Ukraine, European retailers have been proactive in a drive to reduce waste. Yannick Franc continues: “For the past 18 months, the drive for better energy control is everywhere. The impact on the P&L is so important that it is critical to take action”.
In 2022, Carrefour‘s C.E.O. Alexandre Bompard stated that cooling accounted for around 50% of the electricity bill, lighting for 20% and heating and air conditioning for 30%. By 2022, the Group reduced energy consumption by 9% from 2019. By 2024, Carrefour France aims to reduce energy consumption by 20% from 2019. At the Group level, this target will be reached in 2026.
When questioned by mind Retail, Lidl France reduced energy consumption by two-digits in 2022. “In 2022, we achieved a 10% reduction in consumption thanks to our efforts to reduce energy consumption compared to 2021”, said Corentin le Roux. “For 2023 and 2024, we will maintain this momentum and build on our achievements for sustained gains”.
