For the first time, leading pub and restaurant groups, representing 80% of managed outlets across the UK, have come together to benchmark their efficiency on energy consumption to understand its impact on profitability and environmental performance.
Energy is now the second highest controllable cost factor for the sector after labour and, with rising energy prices and environmental taxes eroding margins, hospitality companies will need to grow sales by 12% over the next 5 years on a like for like basis just to stand still.
Undertaken by Carbon Statement, chair of the Hospitality Carbon Reduction Forum, this first benchmark has provided a comprehensive energy performance assessment. This has enabled participating companies to increase the profitability from their energy consumption, track performance against competitors, and importantly identify the areas where they need to improve.
Key aspects for driving performance assessed in the benchmark include: the energy saving technologies deployed, board level support, employee engagement in energy saving and the level of resource and investment committed to reducing energy.
Chris George, Head of Energy & Environment at the Whitbread Group and a founding member of the Hospitality Forum says: "We are committed to reducing our environmental footprint both to support our business performance and as part of our obligations as a responsible company. The industry benchmarking exercise enables us to identify the key areas where we can improve, to share and adopt best practice across our industry."
Findings from the first benchmark have been stark - the difference between the best and worst performing companies in the sector equating to a 2% difference in operating margins.
Mark Chapman, Director of Carbon Statement explains: "Those companies that have started their journey on energy efficiency and are now in a leadership position are outperforming those yet to start, but still too many companies are wasting hard earned profits by not taking energy efficiency seriously. The leading companies that prioritise and implement optimisation initiatives invest up to 10% of their annual energy spend every year – and are seeing results. As energy prices continue to rise, efficient operators will continue to enjoy a significant competitive advantage, especially as the sector operates on such slim margins."
He adds: "We believe this is the first time comparative energy consumption has been benchmarked in this manner and it is significant that such a highly competitive business sector is leading the way."
Tracey Colbert, at Tragus Group added: "This benchmarking exercise has enabled us to identify how we can improve our energy efficiency."
Companies wishing to participate in benchmarking and assessing how they could improve energy efficiency and consumption should contact [email protected]