Roast the chickens earlier and dim the lights: French retailers prepare for power shortages

Supermarket chain Carrefour has hit on a novel idea to cope if the worst-case scenario of electricity shortages comes true this winter in France: firing up the rotisseries it uses to cook chicken an hour earlier in the morning.

It is one of many changes the group is planning or has already implemented at its 1,700 French stores — all aimed at consuming less energy or minimising usage at times of peak demand. Under a recently signed agreement with French grid operator RTE, Carrefour will voluntarily scale back energy consumption when it receives an orange or red alert signifying a risk of outages because the network is under stress.

“It doesn’t make that big of a difference to us if we start roasting the chickens at 7am instead of at 8am, but RTE tells us that such steps would help them at peak times,” said Bertrand Swiderski, Carrefour’s sustainability director. “There may not be enough electricity for everyone this winter, so we have to be ready.” 

Although retailers do not use nearly as much energy as manufacturers, they too are now being drawn into France’s preparations in case of electricity and petrol shortages as a result of Russia’s invasion of Ukraine.

The so-called tertiary sector, which includes shops, financial institutions, and services businesses, was responsible for 16 per cent of France’s energy consumption last year, compared with 20 per cent for industry, and 30 per cent for residential buildings.

President Emmanuel Macron warned in a recent speech that a “general mobilisation” of businesses, households, and government agencies was needed since Russia was likely to cut off gas exports to Europe.

It was a marked shift from the government’s earlier more reassuring messaging that the country’s nuclear energy production made it less vulnerable to disruptions than places like Germany and Italy, which rely more on Russian gas imports.

But with the nuclear fleet operated by state-controlled EDF suffering from widespread outages this year, output has fallen to multi-decade lows and forced the country to start importing electricity instead of exporting it as it usually does.

A wide swath of sectors is now being asked to prepare contingency plans and report back to the energy ministry. The government has also set a new goal of cutting energy use across the economy and public sector by 10 per cent by 2024 compared with 2019 levels.

Nicolas Goldberg, an expert at Colombus Consulting, said the government is pressuring the tertiary sector to do more because there are a lot of potential energy savings, especially during peak hours from 8am to noon and 6 to 8pm. “Retailers, facilities managers and the service sector have not historically focused on energy efficiency since it’s not a source of competitive advantage for them, unlike in heavy industry where energy is a massive chunk of their costs,” he said.

Unusual discussions between EDF and its corporate retail clients have begun over how to manage the peak demand periods on the grid. “They called to ask if they could cut off the power to our stores for an hour a day in the morning,” said one retail executive. Such an outage would make it difficult for employees to prepare for opening, so the company declined.

Electricity suppliers have long used “load shedding” contracts, where companies agree to cut their consumption during peak periods in exchange for financial compensation. But they have historically been more common in industries like automobile, aerospace and chemical manufacturing.

“We will do more this coming winter to help our customers to modulate their energy usage during peak times but I don’t know how well it will work yet for the tertiary sector,” said EDF executive Nelly Recrosio.

“A factory can turn off a production line or a furnace for a day in the winter to alleviate tensions on the grid, but a hotel can’t simply cut the lights out when they have people staying there.”

Carrefour’s agreement to cut back on days where RTE puts out an orange or red alert does not come with financial compensation. At a store in central Paris, executives showed off a software tool that allowed them to pilot the heating, cooling and lighting systems in all of its stores from an iPad. If it gets an alert from RTE, then it is quite simple for it to cut consumption using the software, and it has also identified other offline steps, said Swiderski.

Besides the chicken roasting, the ice for the fish displays can be produced earlier in the day and then stored so as not to turn on the machines in the hours of peak electricity usage. “We’ve also told the staff to just let the ice melt naturally at the end of the day, and not melt it with hot water,” he said.

An industry group called Perifem that includes 11 big food retailers, including Leclerc, Carrefour, Monoprix, and Lidl, as well as mall operators, also agreed in July to a voluntary energy-saving protocol for peak hours from mid-October. This includes turning off signs after stores close, limiting winter heating to 17C as opposed to the usual 19C, dimming the lights by 50 per cent before the stores open and by 30 per cent during opening hours.

The energy consumption of food retailers varies widely depending on store format, product mix, and equipment used for in-store food preparation, preservation and display. Analysts said the refrigeration system usually accounts for 30 to 60 per cent of electricity consumed, lighting between 15 to 25 per cent, and heating and cooling for the remainder.

UK retailers are also stepping up energy-saving initiatives. “We’ve already set an ambitious plan to reduce our energy consumption,” said Neil Coleman, operations manager for energy and innovation at John Lewis. “With energy prices rising, we’re accelerating these plans.”

Retailers are not only making changes from a desire to contribute to the national cause — some face rocketing electricity bills when long-term contracts expire next year. For a small 1,000 sq m supermarket, annual electricity bills are expected to double next year to reach €160,000 to €200,000, which would wipe out “most of the profits”, said Thierry Cotillard, who owns three Intermarché stores and also heads Perifem.

“Retailers don’t have much of a choice but to act,” he said.

Frozen food retailer Picard has long worked on energy efficiency because electricity bills represent a significant cost at about 1.5 per cent of last year’s revenue of €1.7bn. By replacing freezers and installing new equipment, Picard reduced electricity use by 10 per cent from 2012 to 2020, and aims to reduce it a further 10 per cent from 2020 to 2026.

“Every little bit of savings helps, but not everything we have done has worked,” said chief executive Cathy Collart Geiger.

Picard tested out painting store roofs white to reflect light and reduce the need for cooling to no avail. It found another more promising tweak though: stores can raise the temperatures in the freezers by 2C to minus 20C at night without damaging the products because no one is opening the freezers at that time.

Enlisting employees to make small changes is another key. “I’ve asked them to dust the backs of the freezers on a more regular basis, so as to prevent the fans from working overtime,” she said.