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Does Sustainability Translate to a Reduction in ROI?

Convenience leaders discuss expenses, initiatives, more
Sustainability
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Convenience leaders find value in sustainable store design but are aware of challenges like the balance between sustainability and return on investment (ROI), honest communication and the risks associated with false advertising, according to the Convenience Leaders Vision Group’s (CLVG) newest Vision Report, titled “Envisioning Sustainability in Convenience Store Design.”

The report is a compilation of topics discussed at the group’s quarterly meeting, which featured a presentation by James Owens, vice president of retail architecture, and Aksel Solberg, development design studio lead, both from HFA Architecture and Engineering, a firm devoted to architectural design and solutions. They spoke about practical solutions for sustainable construction practices including cost-effective strategies while enhancing operational efficiency.

Solutions

The duo emphasized the role of smart design in optimizing energy efficiency and minimizing environmental footprint. Exterior innovations can include cool roofs, insulated siding, high-performance glazing and thermal insulation, they said. Other sustainable building materials include glass, fiber cement and aluminum, which can be designed to look exactly like wood.

Proper waste management and recycling is important, they said, like using local materials to save on transportation energy and reducing store footprints to reduce the materials needed.

Looking inside the store, the team shared how efficient lighting can reduce energy consumption and enhance the overall look and feel of the store and products. Energy-efficient heating and air system management can reduce air leakage and enhance air quality. Owens and Solberg also recommended choosing locally sourced design elements like wood, rock and other natural materials that are not only sustainable choices but aesthetically pleasing. And, for retailers with foodservice, they said that appropriate fat, oil and grease management can improve air quality and reduce mold growth.

Read on to find out what retailers' primary concerns are.

A Balancing Act for Sustainability vs. ROI

The convenience-store channel has perceived sustainability as expensive, said Roy Strasburger, CEO of StrasGlobal, president of Compliance Safe and Vision Group Network co-founder. He questioned if costs are now more feasible beyond the “feel good, environmental, telling your story aspect of it.”

Some members agreed that they have been performing operational practices that are just "good for business," but not necessarily with sustainability as the motivation.

Sustainable practices don’t necessarily equate to exorbitant costs, though, especially when costly and lengthy certification processes are eliminated, said Solberg. Suggesting a long-term approach, he emphasized the future benefits including longer-lasting materials, energy savings, federal incentives and tax credits could help offset costs.

“You have to think long-term, and you have to think big picture. Because if all you’re looking at is the bottom line, upfront cost of construction and materials, then it is going to likely be more expensive,” said Solberg.

“Everything’s about moderation,” said Tony Miller, president of Brentwood, Tennessee-based Delek U.S. “And I think, yes, we sell gasoline and we have plastic changing tables, but what are some of the things that we can do? And I think if we all just open up our eyes, I think we can take some steps forward. We’re always going to be the guy that’s got that target on our back no matter what we do because of what we’re selling in front of our stores.”

  • Delek US Holdings is No. 31 on CSP’s 2024 Top 40 Update to the 2023 Top 202 ranking of U.S. c-store chains by store count. Watch for the full 2024 Top 202 ranking in the June issue of CSP magazine and in CSP Daily News. 

Owens suggested a practical first step in which a team member trains staff in preventative maintenance and proper operating procedures. Strasburger has a similar model, where his teams proactively communicate operational best practices, such as not propping doors during deliveries and breaking down cardboard boxes for recycling, during employee training.

The 80/20 Rule

The 80/20 rule is a balance where “80% of the stuff is good, applies, we can do it the right way, and the other 20% is a lift that is not necessarily worth the squeeze, nor can we do the squeeze,” said Scott Hartman, president and CEO of Rutter’s, York, Pennsylvania.

Rutter’s sustainability initiatives include white (cool) roofs, vestibules to maintain inside air temperature, cooking ventilation to contain fry oil and offering recycling at all stores. Rutter’s has also studied air circulation and moisture content and ultimately decided to do things to operate efficiently but not necessarily with the goal of being sustainable.

Telling the Sustainability Story and Greenwashing

Telling customers and employees about sustainability practices is imperative, the group agreed.

“Gen Z and millennials are the most sustainably minded demographic of really anybody that’s walking the planet right now,” said Solberg, citing a study by commercial real estate firm Cushman and Wakefield.

Greenwashing is a concern among c-store retailers. Greenwashing is a form of advertising that deceptively uses green PR and green marketing to persuade the public that an organization's goals are environmentally friendly without evidence.

“Greenwashing is all over the place and I really don't like it,” said Hartman. “I see people doing it. I see people bragging about how great they are in some of these things and the reality is, it's a very complicated place to measure and to hang my hat on something that I know is good, I know it's a good answer, but to try to then go to the public and tell them that I just saved 80% of energy savings in my store, unless I can truly hang my hat on that, I'm not really the type who likes to go out and do that.”

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