Demand side management (DSM) is one of the most significant functions involved in the smart grid that provides an opportunity to the customers to carryout suitable decisions related to energy consumption, which assists the energy suppliers to decrease the peak load demand and to change the load profile. The existing demand side management strategies not only uses specific techniques and algorithms but it is restricted to small range of controllable loads. The proposed demand side management strategy uses load shifting technique to handle the large number of loads. Bacterial foraging optimization algorithm (BFOA) is implemented to solve the minimization problem. Simulations were performed on smart grid which consists of different type of loads in residential, commercial and industrial areas respectively. The simulation results evaluates that proposed strategy attaining substantial savings as well as it reduces the peak load demand of the smart grid. © Springer India 2016.