Retailers Storing with Sustainability in Mind: Study

Grocers are embracing sustainability to reduce energy costs and protect the environment as they build new stores, according to the Food Marketing Institute (FMI) Facts About Store Development 2007 report, which the trade group released yesterday.

As many as 34 percent of the respondents to the survey said they are pursuing sustainability initiatives related to new buildings or remodels, and another 40 percent plan to do so in the next five years, FMI found.

Many grocers said they are focusing on reducing their impact on the environment by adding refrigeration management programs and making changes in store design, landscaping, or transportation.

Green building is an important part of retailer sustainability plans, said FMI. Just over 21 percent of respondents said it is a goal for their company, while 58.5 percent said they are looking into green building options. Two in 10 retailers already use recycled building materials such as concrete and steel, equipment, and appliances in remodels or new construction.

Also contributing to sustainability, retailers are retrofitting existing buildings in developing new stores. In fact, retrofits accounted for 60.6 percent of all new stores opened in 2006, exceeding the number of new buildings for the first time since 2001.

The dramatic increase in energy prices has prompted retailers to find ways to minimize additional costs, FMI noted. Grocers are increasingly hiring energy management personnel to help them reduce these costs in store operations, transportation, and warehousing. They are decreasing energy use with LED lighting, skylights, light-motion detectors, and energy-efficient HVAC systems, as well reclaiming heat output, driving energy use to off-peak hours-and most of all, minimizing leaks in refrigeration systems, the FMI survey showed.

Several emerging population trends are shaping new store construction and remodeling strategies, the report found. Retailers are tailoring their services to meet consumer demand for greater convenience, higher quality, more variety, and better nutrition. Many supermarket operators reported they are incorporating health and wellness features into stores, such as medical clinics, and natural and organic food sections.

Retailers also reported they are designing areas for ethnically diverse or gourmet food items.

Fewer new store buildings (39.4 percent) were constructed, the research showed, due in part to the shortage and cost of prime real estate. The average store size increased slightly, to 48,750 square feet. For the second year in a row, the number of closed stores increased, and store remodels and openings were relatively flat.

The median new store cost more than $6.5 million to build in 2006, and increased slightly in size to 46,000 square feet, from 44,753 square feet in 2005. The median decor costs in 2006 added $7.42 per square foot, up from $4.25 in 2005. Over the last two years, many stores were faced with higher equipment and decor costs as a result of including and expanding meal solutions and prepared food areas.

Slightly more than half of all companies surveyed (50.1 percent) remodeled at least one store in 2006. Nearly a third of the respondents (32.4 percent) said they remodeled because they anticipated or had a competitor enter the market. An additional 32.4 percent remodeled to meet the needs of changing customer demographics.

To purchase the study, "Facts About Store Development 2007," ($95 for FMI retailer/wholesaler members, $145 for FMI associate members and $195 for nonmembers) visit the FMI Store at or call (202) 220-0723.
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