The benefit of two-stage heat recovery compared to one-stage heat recovery is not deeply investigated in CO2 refrigeration systems with heat recovery in supermarkets. Moreover, the optimum discharge pressure respecting the thermodynamic principles governing the heat recovery heat exchangers, has not been defined. This study addresses this research gap combining existing knowledge of the pinch point in CO2 heat pump gas coolers and supermarket refrigeration systems with heat recovery. This novel approach leads to more accurate control and design inputs for the commercial refrigeration industry. Key findings of the study in a Swedish supermarket show that two-stage heat recovery, compared to one-stage, improves the Seasonal Performance Factor for heat (SPF) by 17 %, with the refrigeration cycle's annual energy savings reaching up to 4 % in cold climates. Additionally, heat export capabilities to district heating networks are explored, demonstrating a 25 % efficiency improvement with a two-stage configuration instead of a one-stage configuration. Moreover, increasing the discharge pressure by less than 5 bar compared to the optimum value can reduce the total required UA-value of the heat recovery heat exchangers by 45–48 %, with a maximum SPF penalty of 2.8 %