The Food Retail Industry

The Food Retail Industry

An innovative, sustainable retail environment

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A MORE EFFICIENT FOOD RETAIL INDUSTRY

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Sustainable, energy efficient stores Reduced operating costs Improved in-store experience

Now more than ever, grocery stores are seeking to achieve greater energy efficiency and lower operating costs, all while improving the in-store experience for their shoppers.

As the industry continues to focus on serving growing communities with new construction and store remodeling, it’s even more important to incorporate sustainable solutions that can improve the efficiency of stores while also helping to protect the environment.

An investment in more energy efficient solutions can help:

• Reduce energy consumption

• Significantly reduce operating expenses

• Respond to shoppers’ concern for the environment

• Maximize the efficiency of HVAC systems

• Take advantage of government LEED® certification incentives

LESS ENERGY, MORE PROFITS

With industry average net profit margins at less than 1%, it’s critical for companies to take advantage of every opportunity to cut costs. In addition to refrigeration solutions, choosing more energy efficient solutions for HVAC and lighting can be a very cost-effective way for grocery store chains to expand margins and increase profitability.

8 Firms Industry Income Statement (P&L) 2010

Net Sales

Merchandise Costs

Gross Margin

Operating, G&A Costs

Utility Costs

Adj. Operating Profit

Net Profit

CapEx

% of Sales

100%

74.4%

25.6%

20.2%

1.3%

2.7%

0.4%

2.2%

FMI Net Margin estimate: 0.98%

1. Industry P&L includes avg. of 8 firms – Kroger, Safeway, SuperValu, Whole Foods, Winn Dixie,

Harris Teeter, Weis Markets, Spartan Foods

2. Utility costs estimated based on FMI data

Energy Distribution for a typical Grocery Store

How Your Electric Energy Is Used

Refrigeration 38%

Lights 23%

Heating 13%

Cooling 11%

23%

Misc. 3%

Ventilation 4%

Water Heating 2%

Cooking 5% www.energystar.gov/index.cfm?c=grocery.sb_grocery

A SUSTAINABLE WAY TO SAVE

HVAC and energy management. The future of energy saving.

LIGHTING REFRIGERATION HVAC

ENERGY MANAGEMENT,

UTILITY INCENTIVES

AND RENEWABLES

HVAC - VRF

(Variable Refrigerant Flow)

Reduce energy consumption and improve your in-store experience with LG’s HVAC industryleading new technology, VRF.

Benefits

LG’s HVAC VRF will help you:

• Improve energy efficiency

• Lower lifecycle maintenance costs

• Decrease construction time and labor costs

• Eliminate 90% of current ductwork

• Operate more quietly, emitting as few as

23 db indoors www.lg-vrf.com

Outdoor Unit Indoor Unit

LED LIGHTING

Saving the environment has never saved your store so much money. With LED Lighting solutions from LG, you can reduce your store’s energy consumption, lower your power bills and cut down on energy costs.

Benefits

LG’s LED Lighting will help you:

• Achieve lower TCO with monthly energy savings compared to T8 lamps

• Create additional savings with lighting control solutions

• Lower energy costs with longer lifetime lamps

• Provide eco-friendly lighting with no mercury

Features

(based on 2X2 LED Flat Lighting)

• Certification: cUL, FCC, LM79

• Luminous Flux – 3,480 - 4,400 lm

• Wattage – 53W - 68W

• CCT – 3,000/5,700K

• CRI – 75

• Lifetime – approx. 50,000 hours

• 3 year limited warranty

* Also available Retrofit LED Lamps

Flat Lighting LED Lamp

Outdoor Unit Indoor Unit

HVAC-DFS

(Duct Free Splits)

Good HVAC solutions come in small packages.

That’s why LG’s DFS offers the ideal solution for your store’s smaller spaces.

Benefits

LG’s HVAC DFS will help you:

• Meet small area cooling & heating requirments

• Operate quietly and softly

• Offer stylish designs and customizable faceplate options

Features

• Outdoor unit capacity from 18K-36K BTU and indoor units from 9K-18K BTU

• Inverter based Dual / Tri / Quad zone outdoor units with auto restart feature

• Indoor unit with plasma air purifying system

• Gold Fin™ anti-corrosion

* Also Available Digital Signage & Solar

SECURITY

Maximize your protection and minimize your expenses with LG’s comprehensive security solutions.

Benefits

Install LG surveillance and you can:

• Monitor customers in real-time

• Reduce expenses with LG’s Central

Monitoring System

• Store POS information

• Customize surveillance options

Features

• International Standards for the worldwide market (UL, CE, FCC, Gost)

• 650TVL High Quality Image cameras

• Save to synchronize text and images

• The ability to brighten images even in dark environments by using higher AGC

• The best recording speed and quality

• The combination of Analog and IP

• DVR-configurable system

CASE STUDY

BUILDING MODELING SOFTWARE

EnergyPro™ V.5.1 building energy simulation software provided by EnergySoft®, using the following accreditations:

• Uses DOE-2.1E simulation engine from U.S.

Department of Energy

• Approved by the California Energy Commission

• Accepted by USGBC for use with LEED® certification

• Incorporates ASHRAE based load calculations

DESIGN PARAMETERS

The utility rates used for energy analysis were

$0.10/kWh and $1.46/Therm

The store building energy analysis was performed using ASHRAE 90.1 standard

The outdoor cooling design temperature was

80°F db and heat design temperature was 2°F wb

The design conditions were used to model the performance of 2 different types of HVAC systems

• LG Multi V Plus II

• Constant Volume Rooftop Package Units

BUILDING DESCRIPTION

• Store location: Upstate New York

• Total area (Sq.Ft.): 58,400

• Number of independent zones: 9

• Elevation: 1,591 feet

HVAC Systems Annual

Operating Cost

($0.10/kWh, $1.46/Therm)

Store building modeled in upstate New York

$140,000

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

0

27% Saved

LG Multi V CV RTU

Multi V III

Benefits

Efficient Design

The LG Multi V system eliminates energy losses that are unavoidable in other systems that use large air distribution ducts. Optimized scroll compressors, specially designed heat exchangers, and inverter technology, minimize energy consumption over non-VRF systems.

Zoned Comfort Control & Dehumidification

With the use of inverters and dual compressor outdoor units, the LG Multi V system offers superior load matching, preventing constant cycling or large temperature swings. Tight temperature control ensures maximum comfort, efficient operation, and superior dehumidification.

The modular design of VRF results in superior energy savings and flexibility to air condition or heat according to each department’s needs.

Sustainability

The LG Multi V system helps achieve points for sustainability programs. The USGBC has developed holistic design standards for constructing new and retrofitting existing buildings known as LEED® – Leadership in Energy and Environmental Design. LG’s Multi V system is engineered for sustainable green buildings and provide opportunities for designers to claim numerous LEED® prerequisites and points.

Stylish Design

Multi V indoor units are available in a wide range of styles to fit any interior design. With indoor unit choices including cassettes that mount flush to drop ceilings, ducted units that blend into raised ceilings, and mirror finished wall mounted units that fit into any decor, LG’s Multi V system offers unparalleled aesthetic design.

Quiet Shopping Environment

Your clerks can more easily engage shoppers without the fan noise distraction of ducted air

HVAC systems. With indoor units that can operate at sound levels as low as 23dB(A) and outdoor units that operate as low as 50dB(A) and lower with night quiet operation, Multi V creates a comfortable environment so quiet it’s almost undetectable. www.lg-vrf.com

WHY LG?

LG will be your partner to help cut operating costs and improve your shoppers’ experience. Here are just a few reasons why more companies are investing in

LG’s retail solution to improve their grocery store locations.

• LG is making significant investments in sustainable technologies, including energy generation, conservation, and management

• LG can be your partner in supporting your green and growth strategies

• LG solutions can help you reduce energy consumption over traditional HVAC systems by 20%*

* Average reduced energy consumption for a typical store is 20%

• LG can provide you with extensive design, installation, and after-sales services through our certified channel partners

• LG can offer value-added extended warranty and leasing options

LG is continuing to demonstrate strong growth, with 2010 revenues of $63 billion, a five-year sales growth CAGR of 13% and a R&D investment of $1.4 billion.

HISTORY

1947

ESTABLISHMENT

1958

GROWTH

1985 1986 1968

LG Group Established

Goldstar (former LGE) Established

Korea’s first Inverter air conditioner

Manufactured Korea’s first air conditioner

1990 1995

EXPANSION

1998 2000

2001

2004 2008

Introduced picture frame air conditioner for the first time in the industry

Created B2B-focused business structure

Produced Korea’s first commercial air conditioner

Reached total global sales of 100 million air conditioners

Became world’s number one seller of residential air conditioner

Achieved worlds highest annual sales in air conditioner with 10 million units

2010

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All other product and brand names are trademarks or registered trademarks of their respective companies.

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