As food retailers face mounting pressure on margins and operating costs, Jason Kay, Chief Commercial Officer, IMS Evolve, explores how operational intelligence can turn existing data into smarter decisions, stronger resilience and improved commercial performance.
The pressure on food retail margins remains difficult to predict. While official figures showed food inflation falling to 1.3% in July, its lowest rate since September 2021, more recent British Retail Consortium data shows food inflation rising again to 2.8% in August. With energy costs and extreme weather adding further volatility, retailers are continuing to actively shield consumers through intense price competition and discounting.
For food retailers, energy is not simply another overhead. Refrigeration, HVAC and lighting are fundamental to day-to-day operations, and their cost cannot simply be absorbed indefinitely or passed on to consumers. The challenge is therefore to find ways to operate more efficiently without compromising the environments, products and services those systems support.
Most food retailers already generate enormous volumes of operational data across their stores and estates. But having data and being able to use it effectively are very different things. The real challenge is bringing together information from disparate assets and systems, making sense of it in context, understanding where action is needed and knowing what action will deliver the right outcome.
This is where operational intelligence changes the conversation. Rather than focusing on collecting more data, retailers can focus on turning the information available across their estates into better decisions and measurable commercial outcomes. Because data doesn’t run operations. Decisions do.
Why operational intelligence matters
Knowing that a refrigeration asset is consuming more energy than expected is useful. Understanding why, whether it requires intervention and what action is most likely to improve its performance is considerably more valuable.
This is where operational intelligence changes what retailers can do with the information available across their estates. It combines asset data with an understanding of how equipment behaves in real operating environments, what genuinely requires attention and which actions are most likely to deliver the right outcome. The distinction matters because not every deviation represents the same level of risk and not every issue requires the same response.
Advances in AI are strengthening this capability further. Greater processing power allows operational intelligence to draw on more information, explore deeper patterns and continuously refine established strategies at a scale that would previously have been impractical or prohibitively expensive. AI does not replace the operational understanding behind those decisions; it amplifies it.
Asset degradation is a good example. Refrigeration equipment rarely moves from healthy operation to complete failure overnight. More often, performance gradually deteriorates; components begin working harder, energy consumption increases and the asset moves further away from optimal operation. It may continue doing its job, but the commercial consequences can already be accumulating.
Operational intelligence can identify these changes in behaviour, assess them within the wider context of the asset and its environment and determine whether intervention is required. Increasingly complex patterns can be identified and assessed across large estates, helping retailers act earlier and prevent an emerging issue from escalating into unnecessary energy spend, avoidable maintenance activity, stock loss or asset failure.
Enabling estate-wide improvements
The commercial value becomes even clearer when operational performance is considered across the wider business. A single refrigeration issue rarely has a single consequence. The same underlying problem can increase energy consumption, create additional maintenance costs, raise the risk of food waste, affect compliance and ultimately impact product availability.
This is why operational performance should not be viewed as a series of isolated energy, maintenance, reliability or risk challenges. They are often interconnected consequences of how assets and environments are operating. Operational intelligence enables retailers to understand those relationships across the estate, identify where intervention can create the greatest commercial value and prioritise operational resource and capital where it can deliver the greatest return.
Building resilience, not just reducing costs
For food retailers, the value of better operational performance extends beyond reducing energy consumption or controlling costs. It is also about creating estates that are more resilient: where emerging problems can be identified earlier, resources can be focused where they will have the greatest impact and assets can be managed more effectively as operating conditions change.
Crucially, retailers can also measure whether those decisions have delivered the intended result. Operational intelligence should not stop once an action has been taken. By continuing to monitor performance, retailers can verify the operational and commercial impact of an action, understand what worked and use that knowledge to strengthen future decisions. This creates a continuous cycle in which operational understanding becomes more valuable over time.
Achieving this does not necessarily require a wholesale transformation of the estate. For many retailers, significant value lies in connecting to and making better use of the infrastructure, systems and operational data they already have, bringing that information together and applying intelligence that enables informed and automated action across the existing environment. That also creates the opportunity to extract greater value from assets and infrastructure in which retailers have already invested, rather than assuming better performance requires wholesale replacement.
Ultimately, operational performance and commercial performance are inseparable. The same decisions that reduce unnecessary energy consumption can improve asset reliability, prevent avoidable maintenance, protect stock and reduce operational risk. At a time when every margin point matters, the ability to understand what is happening, determine the right response, act and verify the outcome gives retailers a powerful way to protect margin, improve returns from existing assets and build greater operational resilience.
