02.05.2011

EHI Retail Institute GmbH

Energy optimisation pushes the investments in retail - The results of EHI’s Shop Monitor 2011+

The overall investments of the retail industry in the rebuilding and conversion of its businesses amounted to 6.1bn euros in 2009, which was about 1 billion euros more than in the benchmark year 2006 (5.1bn euros). That is one of the conclusions from EHI’s Shop Monitor 2011+, the results of which were presented at EuroShop. The focus currently lies particularly on investments in modern environmental technology with an energy-saving effect. This concerns, among other things, expenditures for an improved energy-efficiency of the outer shell of buildings and an efficient house and building technology, which have forced up the total building budget of retail companies significantly.
In the sales rooms also more is invested in energy optimisation. Compared to the previous Store Monitor and with the year 2006 as benchmark, the investments for shopfitting have increased by about 5,3 percent to 1.4bn, though with a different evolution of the shopfitting costs depending on the branch of retail.

More investments in food retail

Per square metre of sales area the furnishing investments in food retail currently amount to 557 euros per sqm of sales area in supermarkets and small hypermarkets (up to a sales area of 2,500 sqm) and 436 euros in stores with a larger sales area (more than 2,500 sqm). Compared to the previous EHI Shop Monitor 2008+ this corresponds to an increase of 2.6 percent in supermarkets and small hypermarkets and about 11 percent in superstores.
Those increases can in the first place be attributed to high investments by the food retail businesses in the improved energy-efficiency of refrigerated cabinets and cooling equipment. With a share of some 45 percent of the total power consumption refrigeration is the largest energy guzzler in food retail and that is also why there is, nowadays, intense investment in the improved energy-efficiency of refrigerated cabinets and cooling equipment. In that context it is clear that with the growing use of CO2--based installations one opts for particularly innovative, yet still very cost-intensive technologies.

Less investments in non-food

On the other hand a slight drop of the expenditures for shop furnishing of two to three percent is recorded in the surveyed branches of non-food retail. In general the furnishing investments varied in 2010 between 148 euros per sqm of sales area in DIY stores and 540 euros in health & beauty stores. In the specialized textile branch they amount on average to 435 euros/sqm of sales area.
The fall of the furnishing expenditures is all the more surprising as particularly the contacts in the textile, shoe, sports and health & beauty branches point out that the requirements for a competent and attractive market appearance have increased.
Strict cost management involving standardisation and the central procurement of shopfitting equipment, accompanied by decreasing shopfitting prices, have led to a shift in the investment budgets of the food retail industry towards lighting and refrigeration. The shift of the investments for store furnishing towards higher spending on energy products and at the expense of classic shopfitting, also shows in retail’s investment priorities for the coming years. More pressure on development, due to higher energy requirements and therefore also relatively short innovation rhythms, continues to drive investments and to determine the spending behaviour of the retailers, particularly as far as lighting and refrigeration in food retail are concerned.

Shorter renovation cycles

At the same time the retailer, more than ever, has to offer his customers a shopping experience. Modern store concepts should appeal to all the senses and create incentives to buy as well as desires, in short provide a tangible added value. In that context visual merchandising gains importance as it allows to introduce individual accents in relatively standardised shop concepts.
Renovation cycles have consequently been shortened to an average of 8.7 years in food retail and 6.9 years in non-food. One third of those interviewed in various branches of retail are of the opinion that on average after five years the time has come do develop an entirely new concept.

The EHI Shop Monitor 2011+ is based on personal interviews with some 50 shopfitting experts in leading retail companies in Germany, Austria and Switzerland.