Don’t throw away money on your energy costs. Shop around to find the best deal, says Kishor Patel
‘What a waste of money’ - a phrase that’s been frequently directed at Carlos Tevez recently, but is equally appropriate in the context of rocketing energy costs.
I guess there are other similarities not least of which is that the energy companies are about as popular as Carlos Tevez is on one side of Manchester at the moment. Both are regarded as being in the same ‘likeable league’ as phone hackers and Chris Huhne, the current energy secretary.
Why is Mr Huhne getting such bad press? Because he had the audacity to suggest that, while energy companies need reining in, the consumer could do more to reduce energy bills not only by being smarter in controlling usage, but also by shopping around for their energy supplier.
I have sympathy with what he’s saying. As a retailer, I’m constantly looking to reduce energy costs. And this can be done in precisely the ways Huhne advocates by being more vigilant on how much is used as well as by comparing the market.
I hate waste. I hate the fact that it’s almost become an accepted part of our culture to throw perfectly good stuff away. I hate the fact that it comes straight off my bottom line. On the flipside, as a retailer, I see the merits of ‘controlled waste’ by which I mean a deliberate, in-store strategy that will generate more waste, but, crucially, increase turnover and profitability.
Kishor’s tips for cutting waste
1) Shop around for the best energy providers
2) Start monitoring your sales now so you have a comparison
3) Train your people
4) Increase your fresh stock to improve the look of the display
5) Spend as much time on this as you do negotiating prices!
Let me explain. Independent retailers always seem to struggle to create and maintain the same fresh produce standards as their competitors. It’s all about image. If a shopper sees a display of fruit and veg that consists of a couple of lonely oranges next to a tired lettuce, they’re hardly likely to make you their first choice. But if the display is well-stocked and well-merchandised they’re more likely to find it attractive. It’s the ‘busy restaurant’ syndrome if a diner has a choice between a full restaurant and an empty restaurant, they’re more likely to choose the full one.
But and here’s the rub to create that inviting display, the independent retailer needs to fill it with more stock. More stock equals more waste. But, on a Venn diagram, there is a point where the speculation has led to accumulation, so that more stock equals more waste equals more sales. Not always easy to quantify, I accept; sales statistics only show you the sales you made, not the sales you could have made.
However, retailers accept that as chilled sales increase significantly, they need to carry higher margins to compensate for the higher waste. And that same principle applies to energy waste. Over the past 25 years, I’ve seen so many changes in refrigeration, chilling and freezing. We used to think we were the bee’s knees when we had those clear plastic strips on the open dairy decks.
There is currently a trend to install chiller doors. Again, it creates something of a quandary investment versus return. There is clearly a saving on energy bills, but there’s also a higher maintenance cost.
I’m being indecisive on this one. We’re more likely to put doors on the chillers that stock slower-selling lines butters, cheese, etc and, once we’ve seen the results, decide whether or not to expand it to cover milk, sandwiches and snacks.
We have also installed the latest temperature monitoring systems into our stores, which notify us when parameters have been breached. Not only does this cut waste, it also helps reduce our insurance premiums.
And finally, my hobby horse: staff training. We spend a great deal of time and money educating our people, from the day they join us, to think about preventing wastage. Accurate ordering, stock rotation, proactive price reductions and so on.
That’s what it’s all about. Thinking about it, acknowledging that there is a potential problem and recognising that there’s an opportunity to boost the bottom line.
Do you have doors on your in-store chillers?
Would you consider putting doors on your chillers to cut your energy bills?
Don’t know: 9%
No, it’s not a concern: 41%
No, they could inconvenience my customers: 9%
Yes, energy is a huge cost that needs cutting: 38%
Do you support the government’s abolition of sell-by and best-before dates?
Don’t know: 19%
No, the system was fine as it was: 34%
Yes, it will help cut food waste and confusion: 38%
How important are the green credentials of your business to your customers?
Not important at all: 37%
Slightly important: 45%
Very important: 18%
Is the environment more or less of a factor in your business decisions than it was five years ago?
Don’t know: 18%
New in my store
Name: Kay Samra
Type of store: C-store
Main suppliers: Nisa and locally sourced produce.
How often do you get new products in? All the time, especially seasonal fruit and veg. A lot of new products come in on promotion.
What new products have you started stocking recently? Fairtrade and organic wines. Fairtrade and organic lines in general are growing very nicely for us. And the luxury side of the market is thriving.
How did you find out about them? Reading about them in The Grocer. We are always speaking to local suppliers, and customers ask about lines they’ve seen elsewhere.
Is any product selling particularly well? People are going for single malts and premium vodkas such as Grey Goose and Chase, which are selling very well. We try to really emphasise Britishness that’s why Chase is doing so well.
Is any product selling particularly badly and why? People don’t seem to be buying things like Smirnoff, Bells and Teacher’s so much.
Have you delisted any products recently? The last was Rothmans cigarettes. We’ve also delisted Benson & Hedges gold and silver 100s and Lambert & Butler Superkings. Marlboro continues to sell very well.
Any other products you’ve got your eye on? The Co-op is the leader in Fairtrade and organic and we very much want a slice of that market, so we are looking at getting in organic pastas and pasta sauces. Warburtons has its new range and we’re looking at its new crusty loaves.
Property of the week
Fancy a slice of island life? Then take a look at Linkshouse Stores, the hub of the small community in the village of Mid Yell on the Shetland Islands.
The freehold for this post office and petrol station is on the market for offers in excess of £175,000. The single-storey detached property includes a listed-status house with potential for development.
Along with excellent profitability with annual income over £750,000, including Post Office income of about £20,000, the purchaser will also get amazing scenery and a surprisingly temperate climate.
Linkshouse Stores would make a great business for existing island residents or someone seeking a lifestyle change. For further information, contact David Higgins of Christie & Co on 01315 576666.