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High Street Savings

12 April 2011

Retailers are under pressure from a slowing economy, rising prices and climate change campaigners to contain energy use and costs from their operations. Nick Shaw suggests options for retailers to improve energy performance without affecting sales.

WHEN YOU WORK IN THE RETAIL SECTOR, on entering any outlet you are always looking at the standards of how the facilities are being managed, whether you are working or merely shopping! It is essential that the customer is totally focused on the choice of goods and service and therefore generally does not give much consideration to the hard work behind the scenes that creates the customer experience: welcoming, informative, warm, friendly and dynamic retail environment.
Of course, as facilities managers we know some of what goes on behind the displays of goods. Shoppers often make the decision to enter a shop based on its overall atmosphere.
Crucially, that retail ambience is determined just as much by a facilities manager as it is by a friendly shop assistant. The point is that the customers are never meant to be aware of that hard work behind the scenes – particularly with regard to energy management.
Christmas 2010 highlighted the importance of energy management on the high street as environmentally aware shoppers and carbon reduction campaigners asked difficult questions about over heated shops combined with easy access, inviting, wide open door ways. The energy used in a retail sector is vital to creating the required shopping experience of customers but at the same time, because shops are displays of day-to-day consciousness they must be seen to be environmentally aware.
Consequently, after discussions in the media doors were sometimes closed and heating controls turned down. One of the major areas of concern for retailers is managing the energy consumption within their high street outlets. Often these banks, shops or coffee bars are situated in old buildings, sometimes over 100-years old.
Recently one of our customers opened the latest in their popular chain of clothing outlets in an old bank in the City – it looks great, has a great atmosphere but is a challenging site to heat and illuminate well enough for clothes shopping within what is a nineteenth century gothic building. Compare this to an out of town supermarket on a retail park. These facilities are bespoke, tailored to the needs of today’s retailer – even more so than on the requirements for shoppers.
Whether in consumer goods or high street banking, failure in systems to operate correctly directly impact on sales. This is why the remote monitoring of meters measuring power usage is crucial. It is why building management systems are central to efficient and effective control of energy. It is why the management of energy in a retail environment is all about data. As facilities managers we need to measure and interpret that data; we need accurate information to assess the levels of energy use to be able to make accurate recommendations about what systems to employ and which areas of an energy system need repairing, renewing or updating.
Access to the data can be complicated sometimes because of the way meters are managed. More often than not ‘MOPs’, meter operating companies who are independent of the energy providers (i.e. EoN, Central Networks etc) need to be linked into our energy management plans. Liaison is central to obtaining the data as sometimes we can be stuck between the MOP, the client and the electricity provider, and VINCI is seen as responsible for everything else as well.
But, it is important to note that effective energy management systems and controls save clients’ money, not just carbon although they go hand in hand. It meets a corporate responsibility as well as a financial target. It also means that in almost all of the building fabric, M&E, HVAC and general work, VINCI involvement is always conducted with energy management in mind, with selection of equipment, running costs and lifecycle analysis all forming part of the quotation and selection process. But to do it well, facilities managers need to think like a retailer, which means working in close partnership with our clients.
This is what we did with one of our retail banking clients when Vinci undertook a pilot project at the end of 2009 where a simple building management system (BMS) was installed in 30 locations as a trial. The goal was to determine the payback period for the BMS that controlled lighting and air conditioning units together with the lighting for exterior signs the heaters above the entrance doorways. The plan, if successful, was for a progressive implementation across the whole estate.
For the results to be representative it was important to use a variety of premises to give a fixture of both higher and lower energy consumption. The pilot lasted for four months and when the data was reviewed showed that set against the record of the year before and compared to locations where no interventions had occurred, savings higher than 16 percent
had been achieved.
So, it made sense then to work with the clients property team to extend this project to a further 180 sites – which added to the first batch of 30 comprised about a quarter of their estate. At the time the client was part of the way through a contract for electricity supply which they had signed when prices were high. This meant the financial payback for the case was more easily made. By the time the programme was rolled out over the additional locations their unit rate/kwH had been reduced by over 40 percent.
There were some issues with planning departments in the installation of BMS equipment in some of the locations, which meant that we only had fiscal meters installed at these sites. We worked around this as these served as good "control" sites against which to benchmark the others that had meters and BMS in place.
Across a 12-month span in the 210 locations we are now showing a consumption saving of
 lmost 20 percent. The value of the fiscal saving has clearly reduced as the cost of electricity decreased but the contribution to the client's CRC and the alignment with their general commitments to sustainability and CSR mean the investment was seen as beneficial.
One of the biggest challenges our team faced was convincing staff in the various branches that a BMS was a good thing as they were not used to having any external influence over their local climate. Another issue, highlighted by green shoppers and environmental campaigners at Christmas 2010 was changing the culture of staff to accept more subtle changes to the temperature. Fortunately the client’s central property team were quite happy to push back on local staff that had become used to tropical temperatures in winter and an icy crispness on hot days in the summer.
For a separate retail customer VINCI had a far more focussed objective, namely to reduce the energy consumption and carbon footprint throughout estate of one of the UK’s newest brands on the high street, with over 200 outlets across the country, but targeting what could be achieved within a single 12 month payback period.
Again, central to the success of the project was thinking like the retailer. This meant working closely with the internal customer team, tapping into their expertise as well as working alongside specialists within our supply chain.
VINCI analysed the energy consumption of 239 stores in mid-2010. After pinpointing where the focus should lie we began work to reduce the energy consumption.
The main concentration of our teams’ operation was maintenance of the building management systems, monitoring and scheduling the use and maintenance of the lighting, establishing a more effective heating, ventilation and air conditioning schedule and control system and doing the same for water. But we also worked hard to engage everyone on the client side – from the in house property team right down to the employees within the shops on the high street.
So far, the results have been good. In 2010, 72 stores had works completed at a cost of £65, 000, achieving savings of over £600,000 per annum. This success was replicated in 2010, involving 31 stores at a cost of £16,000 and achieving further savings of £280,000 per annum. An additional £90,000 per annum has been achieved through water consumption savings. In 2011, our efforts are concentrated on new lighting design and re-fit of energy efficient lighting designed in conjunction with Vinci and our supply chain. This will affect around 30 stores with projected savings of around £342,000 a year against an investment of £130,000.
Nick Shaw is Divisional Director at Vinci Facilities

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