Wal-Mart: Setting a new trend in retailing

- Estela Banzon-De La Paz () - August 21, 2006 - 12:00am
Wal-Mart, the world’s largest retailer, is now setting a new trend in retailing – going green.

But can conservation really go hand-in-hand with the business of retailing where prices seem to dictate where consumers, especially in the Philippines, will ultimately go?

Ben Cornish, Wal-Mart vice-president for development in China said that contrary to common belief that conservation will mean higher-priced goods, conservation can actually result in savings that their customers will ultimately enjoy.

Cornish, one of the keynote speakers at the recent 15th National Retailers Conference and Stores Asia Expo organized by the Phil. Retailers Association (PRA) said that "conservation makes good business sense."

He explained that one of the things they found out when they started analyzing their operations to see how conservation can fit in, is that there is a tremendous amount of waste that costs a lot of money. Eradicating this or at least minimizing it will result in a lot of savings which Wal-Mart eventually can pass on to its customers.

Citing an example, Cornish said packaging can give a lot of savings for the consumers. "In a box of cereals, you will notice that only about half of the carton is being used. If the box is made to fit for that quantity, then we save on the cost of the carton, less trees will be cut to produce such cartons and with the volume that we order, that will mean a lot," he said.

He said that since Wal-Mart formally announced its commitment to conservation last October 2005, they have been talking to their vendor-partners or suppliers on how they can reshape their production to fit in the concept.

According to an Aug. 28, 2006 Fortune magazine report, Lee Scott, Wal-Mart’s CEO set several ambitious goals to merge its conservation policy with its operations. These are: increasing the efficiency of its vehicle fleet by 25 percent over the next three years, and double efficiency in 10 years; eliminate 30 percent of the energy used in its stores and reduce solid waste from US stores by 25 percent in three years.

Wal-Mart will also invest $500 million in sustainability projects. To date, it is the biggest seller of organic milk and the biggest buyer of cotton in the world. Wal-Mart has also partnered with Conservation International (CI) to help them in their mission to "save the earth."

Cornish said for their part in China, they started with energy conservation simply by using T-5 light bulbs which are very efficient. He proudly says they were the first to use the GE and Philips T-5 light bulbs and their experiment paid off with savings of about 50 percent.

This, he said, was a very logical thing to do as China’s cost of power was expensive even way back in 2002. With the increases in fuel costs worldwide, Cornish said, they know they made the right decision.

Cornish added that the inculcation of conservation in their operations is not really different from the founding principles laid out by their founder–Sam Walton. These are: respect for the individual both for their customers, employees and vendor-partners; best service; and try to get better, stay ahead of competition. Wal-Mart has a slogan: "Our people make the difference." With their determined and concerted effort for conservation and sustainability, this will really come true as it will not only give back to its customers, employees, partners the savings generated, but also a healthier and better world.
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