Skip to footer

Energy efficiency: how retailers save money

Energy efficiency offers retailers like Walgreens and Kohls an edge over their competitors, Asplin writes. It’s about the bottom line, pure and simple.

|
Toby Talbot/AP/File
Shoppers enter the Kohl's store in South Burlington, Vt. Kohl’s saved $50 million in energy costs over four years and has continued to improve its energy performance with lighting and energy management systems upgrades, Asplin writes.
  • By Allison Asplin Guest blogger

When it comes to energy efficiency, retailers are on a roll. Convenience store chain Wawa announced last year that it saves over $1 million a year in energy costs thanks to an LED lighting retrofit. Nationwide department store Kohl’s saved $50 million in energy costs over four years and has continued to improve its energy performance with lighting and energy management systems upgrades.  As a result, Kohl’s claims, “we have one of the lowest energy usages per square foot in the retail industry.”

Walgreens, the country’s largest drugstore chain, recently completed lighting retrofits at 80% of its locations nationwide. The company said this change not only saves money, but also improves the customer experience: “Colors appear more vibrant and more like they would in daylight, so customers don’t need to second guess themselves in the cosmetics aisle.”

For retailers like these, energy efficiency offers an edge over their competitors. It’s about the bottom line, pure and simple.

The quest for a competitive edge may explain why retail stands out as the only sector of the commercial real estate industry that has shown appreciable success in overcoming the plague of the “split incentive.” 

Quick background on the split incentive: in most leased buildings, the owner is responsible for capital improvements, including most energy efficiency upgrades, while the tenant often bears responsibility for the utility bill. The owner, therefore, has no incentive to invest in energy efficiency. (For a more detailed explanation, see “Why Energy Efficiency and Buildings Don’t Mix”.) Yet a recent evaluation of a retail-oriented energy efficiency program in Wisconsin indicated that approximately half of participating retailers completed retrofits in leased spaces.*

We can’t say exactly why the Wisconsin program had such a good response from retail tenants, but I suspect that the structure of retail leases plays a part.  Compared to a standard office lease, the most common type of retail lease gives the tenant much more control to make improvements. Could this arrangement work as a model for a “green lease” in other types of buildings? Tell me your thoughts in the comments.

*Full disclosure: I worked on this evaluation as part of my responsibilities at Cadmus.

Source: Retailers Chase Energy Efficiency for a Competitive Edge

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Energy efficiency: how retailers save money
Read this article in
https://www.csmonitor.com/Environment/Energy-Voices/2013/0510/Energy-efficiency-how-retailers-save-money
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe