Why are hypermarkets switching to VRF?
Over the last two decades, hypermarkets were introduced to the Egyptian market proving themselves to be the perfect one-stop shop to buy all your family’s needs, whether its groceries, home appliances, or even children toys. The secret to hypermarkets success in Egypt is down to one factor. Hypermarkets provide the lowest retail prices since they have the largest economies of scale. Meaning they can buy a product from a manufacturer directly in large volumes obtaining a low price per unit. The number of hypermarkets is increasing every year. Even commercially isolated regions like Upper Egypt are starting to join the trend. Last year, the first hypermarket was opened in Upper Egypt, Asyut. The project is funded by a Saudi Arabian investment group and its planning on opening a total of 15 branches all over Upper Egypt.
Unfortunately, it hasn’t been all that great for hypermarkets. The devaluation of the Egyptian pound leads to a significant increase in prices of most products sold, meaning the purchasing power of their clients has decreased. This sudden change is affecting the total profits for hypermarket owners, and they are desperately looking for different ways to compensate for the losses. One limitation to hypermarkets is their huge size. They consume large amounts of energy for HVAC and lighting. In addition, the recent economic reforms lead to an increase in electricity and gas prices. As a result, new branches designs are taking into consideration energy efficiency, and owners are motivated to invest heavily in energy efficient equipment. Since HVAC consumes 70% of commercial buildings’ energy consumption, it has become a priority for energy savings.
Let’s look at a study done by 365 Ecology on Hypermarket branch in the North Coast . This study compares how VRF will perform compared to the package system which is currently used by other branches. it has a 1400 m2 ground floor for sales, and a 420 m2 basement for administrative purposes. The following graph estimates the total running + initial costs of using LG Multi V vs a traditional package system.
It is clear VRF will save millions of pounds over the lifecycle of the project. The amount of money saved could allow Hypermarket series to limit the increase of their products prices, this way they remain ahead of their competition and they don’t lose their clients purchasing power.
One of 365 Ecology’s current clients is Hyper Market. the market is a Saudi based grocery retail company specialized in supermarkets and hypermarkets. it is founded Saudi Arabia’s first ever hypermarket in 1978 in Riyadh. They own 470 stores in Saudi Arabia and UAE and recently decided to expand in Egypt as part of their regional dominance strategy. The first Egyptian branch was opened in 2015 in 6th October.
The second branch was opened in the Fifth Settlement as a two-floored store in a tower. The store’s estimated power consumption expenses were LE 600,000 per month. the engineering management contacted 365 Ecology asking for a solution to reduce power consumption. 365 Ecology studied the HVAC system in use and recommended switching to LG Multi V VRF to reduce the store’s total energy consumption by 30% and HVAC consumption by 50%. the consultants reviewed and approved of the final design, and the project is currently under construction.
VRF is the most energy efficient HVAC system for hypermarkets since their cooling capacities fall under the VRF range, which studies show to be from 40 – 500 RT. Also, hypermarkets require individual cooling zones, as they sell a variety of products that require different temperatures and humidity levels. For example, the dairy products section requires a lower temperature zone than the bakery section. Besides, hypermarkets have large open areas that may require AHUs to cover the large airflow rate, and VRF is compatible and operates optimally with AHUs. It is only a matter of time before hypermarkets engineering management discovers the importance of switching to VRF. The initial signs are already set in motion, and as commodity and electricity prices keep increasing, owners will make the switch faster than ever.