Why Utility Data is Retail’s Most Overlooked Cost Lever

Retailers continue to face margin pressures driven by supply chain disruptions, inflation, changing consumer behavior and rising operational costs.

Electricity is one of those rising expenses. It has outpaced overall inflation since 2022, according to the Consumer Price Index, and the U.S. Energy Information Administration reports that retail electricity prices were up 6.8 percent year-over-year as of November 2025.

Retailers only have so many options for cutting costs in a meaningful way. Large, visible levers such as merchandising or supply chain are often the first places owners examine. Utilities, however, are often overlooked, even though they represent a controllable, recurring expense. One possible explanation is that retailers are unaware of the control they do have over their utility costs.

Historically, retailers have implemented common-sense, check-the-box utility changes that deliver immediate savings, such as converting to LED lighting. Many have also deployed systems that provide real-time visibility into consumption and generate alarms when equipment or usage patterns stray outside expected norms.

What has historically gone unmanaged, though, is the universe of advanced data already available within those systems. Over the past 10 years, smart meters have become standard across the country and now serve roughly 80 percent of U.S. electricity customers, including most retailers, manufacturers and consumer products companies. When properly analyzed, interval data from smart meters can uncover broader patterns in energy usage that retailers can use to build a list of money-saving operational changes.

Smart meters typically record usage in 15-minute increments, offering granular insights into stores’ utility load profiles. Among non-grocery retailers, lighting and HVAC drive daily peaks and valleys, while refrigeration makes up a significant portion of the total load in grocery environments.

In order for utility data to be actionable, retailers have to triangulate it against other important information. In-store traffic heat maps and equipment sensors can help connect energy use with customer presence, movement and dwell time. External climate variables such as temperature and humidity should also be incorporated to explain seasonal fluctuations, particularly during peak winter and summer months. By creating a model that unifies these various data sources in real time, retailers can easily pinpoint opportunities for high-ROI fixes that can be acted on quickly.

One frequently untapped area of savings lies in adjusting store-opening and store-closing procedures. Store HVAC systems are typically programmed to maintain lower store temperatures during the night and begin heating up the space once the first employees arrive in the morning. By aligning the ramp-up in temperature with actual traffic patterns, retailers can eliminate several hours of unnecessary load each day.

Even during operating hours, modest setpoint adjustments can be imperceptible to customers while meaningfully reducing electricity costs. Raising a thermostat from 72 degrees to 73 or 74, for example, can be done without affecting customer comfort or negatively impacting their purchasing behaviors. Retailers can determine for themselves if this is a practical choice by running a simple A/B test between comparable stores in the same climate.

Additional opportunities for savings can be unlocked by attaching outcome-oriented data to the insights retailers are already receiving. Although alarms and alerts can be valuable for detecting anomalies, owners sometimes find the sheer volume of notifications overwhelming. By examining which issues are connected with the highest financial impact, retailers can prioritize the alarms they want to address. This could include things like broken temperature sensors, malfunctioning supply fans, or a building automation system not operating as intended because it's been manually overridden.

The deeper operators engage with their available utility data, the more opportunities they tend to uncover for reshaping energy consumption patterns, which in turn can help strengthen margins.

Tyler Higgins is a managing director at AArete, a global management and technology consulting firm.