Case Study: Open + Close Utility Account Services

A private equity-owned, Fortune 500 discount retailer operating more than 18,000 stores in 47 states. The stores sell frequently-used products, including food, snacks, health, and beauty aids, cleaning supplies, basic apparel, housewares, and seasonal items at everyday low prices in convenient neighborhood locations.

The retailer is rapidly expanding, with approximately 1,000+ new store openings per year. General contractors put utilities in their name during construction. Responsibility for the utilities transfers to the corporate office once construction is completed. Unfortunately, this transition was not happening in a timely manner. As a result, the client was missing utilities turnover deadlines, and shut-offs were frequently occurring.

Once permitting is complete and build out dates are set, a lack of organization in initializing utility accounts can delay store openings up to 30 days. In addition to lost sales, committed salaries are paid out with no actual work attached. These factors have a direct negative effect on EBITDA.

Additionally, stores were often caught off guard when initial utility bills went unpaid, and services were turned off with no notice. When this happened, stores had only two to four hours to save refrigerated and frozen foods. Water, heating, and air conditioning was turned off, and stores were forced to close down until utilities came back online. The company stood to lose $15,000 – $20,000 in perishable food products in addition to the opportunity cost of lost revenue while closed down.

• The client hired Cost Control Associates (CCA) to help them proactively avoid missed store opening dates by managing the utilities open and close process for all new stores. CCA established a one-month pilot project to ensure success and is now working on a multi-year project to manage an effective opening and closing of utilities accounts.
• CCA helped a rapidly growing retailer to avoid $6.75 million in lost revenue with an effective utility account transfer service. The growing retailer went from five months behind in transferring services to working ahead by 1.5 to 2 months. They no longer deal with disconnects and avoid costly shutdowns and loss of perishable products.