Counteracting Inflation: Restaurants Power Up Strategies to Cut Energy Costs

Margin pressures are a fact of life for today’s restaurants, which face significant food, energy, labor and insurance costs. Last year, 42 percent of operators surveyed for the National Restaurant Association’s 2026 State of the Restaurant Industry Report were not profitable, and these expenses weighed on them. Energy has been a particular stressor. In March alone, wholesale energy prices rose 8.5 percent over the previous month.

But multi-site foodservice operators juggle competing priorities when they rein in their energy spend. On the one hand, lowering their energy expenses could improve their bottom line. On the other hand, operators depend on their energy-intensive equipment, from HVAC systems to refrigeration, to deliver a consistently topnotch guest experience.

The temperature in the restaurant must be just right—not too hot or too cold. The milk in diners’ morning coffee can never spoil because the refrigerators aren’t working properly. Every time diners line up for a limited-time-only special, restaurants must deliver, rather than turning customers away because of a freezer breakdown.

Energy management systems (EMS) based on Internet of Things (IoT) technologies help restaurants drive costs down while keeping customers happy. Operators use these systems to connect, control, and monitor their kitchen equipment—across dozens, hundreds, or thousands of sites—from the cloud. Actionable data, reports, and alerts from their EMS software help them lower costs while maximizing their guests’ comfort, safety, and more.

During a recent pilot of an energy management system, one regional restaurant chain achieved a 16 percent drop in electricity consumption. Among the costly problems managers discovered at these and other sites: exhaust fans and make-up air units staying on all night, electric heat remaining on in a front vestibule 24/7, and a refrigerated beer line switched on, unnecessarily, 24 hours every day.

Restaurants also use these systems to improve:

Preventive maintenance programs. The purpose of these programs is to identify issues before failures occur, while maximizing the efficiency and lifespan of every piece of equipment. EMS data keeps operators on top of maintenance schedules and allows them to organize fix lists by level of urgency. As a result, restaurant operators avoid reactive repairs, which often cost three times as much as preventive maintenance does.

Staff training and coaching: When EMS data shows a refrigerator struggling to stay at its required temperature, it might not be ready for a landfill. Instead, it might just need a good scrub. Cleaning dirty compressor coils can reduce a unit’s energy consumption as much as 30 percent. The data might also signal a need to coach staff to inspect and clean the coils more regularly.

Diagnose: EMS solutions not only diagnose equipment issues; they often identify the components needing repair/replacement. This enables technicians to make service calls with the right parts in hand the first time. Restaurants save twice: on energy when inefficient equipment is restored to prime condition, and on individual truck rolls, which typically cost $500-$1,000.

Equipment usage and synchronization: During the summer, when temperatures in some regions exceed 100 degrees for days, restaurants may automatically power up every air conditioning unit simultaneously. This can raise their peak demand charges, which can comprise 20-30 percent of a monthly electric bill, and are based on the highest amount of power used during a set period, such as 15 minutes. AI solutions integrate with connected equipment to optimize and synchronize equipment usage and drive demand charges down.

Repair results: HVAC technicians may believe they have fixed an equipment problem when data reveals otherwise—helping them to get to the root cause of issues and finish the job.

Critical but routine operations: It’s easy for restaurant staff to forget about turning off an air conditioning unit, adjusting the indoor or outdoor lighting, or other routine tasks when they’re giving attention to their customers. Energy management systems enable restaurants to implement HVAC set points and lighting schedules so that staff never need to touch them. The same energy management systems also help restaurants to reduce food waste, improve sustainability and operational efficiency, and more.

As foodservice operators navigate a more volatile economy, EMS data provides reliable intelligence to keep their saving strategies on a steady course.

Jay Fiske is President of Powerhouse Dynamics, an Internet of Things (IoT) solutions provider for eliminating waste in the operations of multi-site foodservice and retail facilities. Their IoT platform, sold under two different brands—Open Kitchen® for foodservice operators and SiteSage® for retail and other commercial operators—provides control over key equipment for reduced waste and increased cost savings, actionable insights for more informed decisions on equipment and operations, and improved processes for consistent, positive experiences in their facilities.