How we supported a Real Estate Advisory firm in analyzing the energy consumption trends of supermarkets across the U.K.

December 21, 2021

The Context

The client, a U.K. based Real Estate Advisory Firm dealing in the grocery sector, owns rental property and leases the same at varying terms to U.K. supermarkets. As the U.K. government introduced the sustainability target of becoming carbon neutral by 2050, the client saw this as an opportunity to offer solar energy to its tenants as an add-on to its current service line. The client wanted to understand the energy consumption pattern of supermarkets to measure the addressable market size for its new service and requested the TresVista Team to collect data on the energy consumption of U.K. supermarkets.

The Objective

To conduct market sizing analysis of the energy consumption trends for the top U.K. supermarket chains and volatility assessment of the revenue profiles of various solar energy funds based in the U.K.

The Approach

The TresVista Team followed the following process:

  • Identified the key demand drivers and triangulated the addressable market size by using metrices such as, no. of stores (by type), average size per store, and energy consumed (KWH) per m2. The TresVista Team carried out their analysis based on the theory that energy consumption per store is inversely proportional to the size of the store
  • Performed analyses to quantify the decrease in the proportion of fixed revenue profile of solar assets from subsidies (Renewable Obligation Certificate & Feed-in Tariff)

The Challenges We Overcame

The major hurdles faced by the TresVista Team were:

  • The data availability for the energy consumption figures as these were not reported by the retailers
  • Many research papers that directly addressed the target market size used were outdated

To overcame these challenges, the TresVista Team analyzed alternative research studies and extrapolated their findings to achieve the desired results.

Final Product (Sanitized)

 

The Value Add – Catalyzing the Client’s Impact

The TresVista Team deep-dived into the dynamics of total energy consumption of top U.K. supermarket chains and used the findings to come up with a measure of the addressable market size. The team conducted additional research and shared a list of sustainable energy targets set by top U.K. supermarkets with the client, which further strengthened the understanding of the desired market. The output was used in the client’s marketing material to pitch a new service line to investors.

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