Zahn, Gordon W.

English

Research Papers in Economics

FOOD RETAILING
by
Gordon W. Zahn
H. E. Butt Grocery Company
Corpus Christi, Texas
In February of this year Dr. John
J. McKetta, E. P. Schoch Professor of
Chemical Engineering, at the University
of Texas, gave a speech in Houston to
the Electrical Trades Industry’s Show,
and in that speech he said he was told
by the master of ceremonies that he
could tell one joke - the joke he told
went like this: “The Federal Govern-
ment will solve your energy problem.”
I do not repeat this out of disrespect
for Mr. Rappaport and his Department in
the Federal Energy Administration, but
it does relate to some of the things
that have been said earlier today.
Because of the high cost of
energy in all walks of life today and
in the future, conservation practices
are most frequently initiated by econ-
omics, and for economics, rather than
a genuine “cause for concern” over
shortages of fuels.
Many of us face extremely high
operating costs and product cost in-
creases due to the rapidly increasing
need for energy to meet requirements
for the production of goods and the
operations of business and industry.
Our best efforts at the present time,
will be used largely in maintaining our
present level of expenditure for energy
consumption rather than achieving a
reduction in dollars. Electric utility
rates in our operating area have in-
creased 13% since October of last year,
and our rate of savings, in our efforts
to reduce h~t consumption, have not prod-
uced a consistent percentage reduction
equal to that figure. The reduction of
dollars spent will have to come from
achieving KWH savings in excess of the
average rate increases. This is true
because of the diminishing rate struc-
ture used by the utility companies. Our
cost of KWH in the higher consumption
brackets is approximately 60% of our
average cost. This means savings are
realized at the same 60% - unless we can
affect the rate bracket by reducing con-
sumption significantly.
All of the figures quoted include
fuel cost pass through and electric con-
sumption charges.
I thought I would show you something
about H.E.B. first - for those of you not
familiar with our operations - and then
go into some of the conservation endeavors
we are undertaking.
H. E. Butt Grocery Company operates
143 supermarkets in Texas (and only in
Texas ). At 10:00 tomorrow morning, we
are opening our 33rd store here in San
Antonio on Lockhill - Selma and 77 W.
Military Drive.
We operate bread and pastry bakeries
in San Antonio and Corpus Christi, a Park
Products Manufacturing Plant in Corpus
Christi, packing 30 products under such
labels as H.E.B., Royal Maid, Park Manor,
Village Park and Silvex. This plant also
February 77/page 118 Journal of Food Distribution Researpacks about 75 jumbo cars of oil for
Saudi Arabia - cooking oil that is.
Our ice cream plant also in Corpus
Christi, packs some 50 flavors and
grades of ice cream and frozen desserts.
We have just opened an ultra modern
milk and dairy products processing plant
here in San Antonio. This plant has at
this time the distinction of being the
most modern plant of its kind in the
nation. It is fully automated from un-
loading at the receiving area to the
selection of cases for loading on our
delivery trucks.
A modern meat processing plant is
planned for completion in 1978 and will
be located at the site of the milk plant
in San Antonio.
H.E.B. operates it’s own warehouses
and distribution centers - a 480,000
sq. ft. center in San Antonio, plus
34,000 Sq. ft. for storage of frozen
food and 47,000 sq. ft. for distribution
and storage of produce for the stores.
This facility also includes a 30,000 sq.
ft. perishables distribution center for
deli meat items and cheese. Corpus
Christi is the site of a 142,000 sq. ft.
dry storage warehouse and Harlingen has
50,000 Sqo ft. of dry grocery storage.
H.E.B. operates the H.E.B. Construc-
tion Company and other support groups
such as garages, fixture and equipment
shops, our refrigeration and maintenance
divisions and the H.E.B. Properties Com-
pany. The landlord for several company
owned shopping centers and commercial
buildings.
Energy conservation programs at
H.E.B. pass through two different com-
mittees before final approval from the
corporate operating committee.
A briei review of some of the things
we are doing .Lnd Lhen 1’11 let Paul ild:]n~~
say a few words about how energy is used
in Supermarkcls.
The Ener\y Awareness Program involves
people - it is Lllcpromotion of energy
conservation +t the people level and is
a reminder cdmpdign. We use graphics in
all stores, warehouses, plants, offices,
and support group facilities to help
remind people of their responsibility to
energy conservation. Our employee maga-
zine supports this program on a quarterly
basis and employee suggestions are en-
couraged tind printed in the publication.
Awards and o~llct- incentives are planned
to add greater emphases to this campaign.
In December of last year we installed
our IBT1System/7 computer in the San
Antonio Distribution Center. We later
added one .sLore to the program and are now
in the process of planning to add 4 to
6 stores per year.
We are using the IBM software program
for power management called Rich’s I.U.P.
for Department Stores. We could not
utilize tilepotential of the System/7,
however, without customizing the software
to fit our particular needs - we did some
things in the first store we will not do
in the additional stores, and we will
hopefully improve our results and reduce
our costs per store for installation.
Our plqns at this time are to change
support !:~rdwdre on our future iMt&3lh-
tions. Tile IBM Power Management 11 program
is a program developed for supermarkets -
and it will still be customized to our
requirements - making it a far more
superior program than what we now have.
Support hardware will be changed - pending
final approval from F&M Systems Equipment
to the Dorado equipment - thereby reducing
our costs and increasing our program
capabilities.
Journal of Food Distribution Research February 77/page 119The System/7 is controlling devices
in both our warehouse and our stores -
such as: refrigeration compressors and
motors , air conditioning compressors,
air handler units, forced air gas
heaters, radiant heaters , parking lot
lighting and perimeter lighting, out-
side signs, interior lighting during
night stocking hours. The “Seven” is
also monitoring demand defrost condi-
tions in low temperature cases, doing
other duty cycling and is controlling
peak demand KW by pre-set target.
The System/7 provides a printout
every 15 minutes of the KWH consumption
for each location and prints other data
as designated by the programs. We have
not attempted to control interior store
lighting in the sales area of stores
during daytime hours due to some opinion
differences among management. We are
attempting now to establish foot-candle
levels we think everyone will agree with
and proceed from there.
Mel Anstine has initiated and
installed a program for demand defrost
in all of our stores using open display
frozen food cases. The Altech Senzor
used in these cases is shown here and
it operates on the density of frost on
the coil. It is 100% solid state, easy
to install, and is completely independent
in its operation. The number of defrosts
recommended by the manufacturer have
been reduced by up to 75% in some San
Antonio stores. The cases on which these
units are installed use a booster heater
for fast defrosting. The KW of this
heater is about 1.32 or slightly over
13,000 watts. You can tell from this,
that as defrosts are eliminated, KwH is
saved. We have projected savings in
excess of $200.00 per month from these
units.
February 77/page 120 Journal of Food Distribution Research

FOOD RETAILING

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics