Energy – Change Needs to Happen
Australia is said to have the highest energy costs in the world; and generally speaking, in Australia energy is usually the third largest expense in a business.
Energy is fundamentally a sustainability issue as well as an economic issue.
The Large Format Retail sector is a low-cost business model. Large Format Retailers typically have physical stores as well as a presence online; they are the definitive version of ‘New Retail’. The physical stores are large in size so as to offer the customer the range and choice of products. Like all business, Large Format Retailers constantly reflect on the expenses in their business.
In 2017, the LFRA engaged PwC to undertake a scoping exercise on electricity costs and consumption of its Retail members. The data confirmed that the cost and consumption of electricity was very high.
A report published on 11th July 2018 by the Australian Competition and Consumer Commission (ACCC) titled ‘Restoring Electricity Affordability and Australia’s Competitive Advantage’ included details of an application received and approved by the ACCC from South Australian Chamber of Mines and Energy (SACOME) for a Collective Bargaining Agreement for Energy.
A group of SACOME members entered into an ACCC approved buying arrangement for energy with the Sanjeev Gupta led company, SIMEC ZEN Energy.
Armed with the results of the energy scoping exercise, the ACCC report on electricity and SACOME’s submitted, and subsequently ACCC approved buying arrangement, the LFRA set about garnering support from its’ members for an Application to the ACCC for approval for a Collective Bargaining Agreement for Energy.
After much work, including data aggregation, the LFRA is now poised to make an Application to the ACCC. The LFRA’s application will comprise 40 LFRA member participants and the LFRA itself; cover 4,096 Large Format Retail stores across all Australian states and territories as well as other assets such as some Homemaker centres.
The LFRA is taking a pivotal leadership role in energy management; a role that will ultimately benefit the customer.
Philippa Kelly, Chief Executive Officer, LFRA
