Green Grows at Retail

From supermarkets to specialty stores and discount chains to fast-food restaurants, the rush to embrace sustainability is reaching a fevered pitch. What started as a grassroots movement just a few years ago is quickly approaching a point of inflection. There has been a permanent shift in the way retail executives think about all things related to green, and this new outlook is impacting everything from the way IT applications are deployed to the materials used for building and remodeling stores.

Initiatives started years ago to scale back energy consumption and encourage shoppers to “reduce, reuse and recycle” have evolved into ambitious programs aimed at cutting carbon emissions, utilizing alternative energy sources, building environmentally-responsible stores and developing efficient transportation methods. CPG companies are redesigning product packaging to be more eco-friendly, and a growing number of manufacturers are now creating green-friendly products.

Green programs are no longer merely nice to have; incorporating sustainable practices into the retail business is a must.

There’s no question that it takes green to go green, but rising energy costs and looming budget crises have cast these programs in a different light, and the ROI time frame for some initiatives has been cut in half.

Green initiatives remain a positive way to connect with an environmentally sensitive shopper; they also go a long way toward building corporate social responsibility. But it’s the potential to reduce energy costs and drive down operational expenditures that have made green programs a top priority for 2009.

Energy experts say this new sense of urgency around sustainability could not have come at a more appropriate time. Fuel prices may have declined from their record highs, but the cost of heating oil and electricity continue to soar. Energy efficiency remains the quickest, cheapest and cleanest solution for addressing demand and mitigating climate change.

This special section, sponsored by IBM, marks the official launch of monthly coverage of this burgeoning topic in STORES Magazine. As you turn the pages, you’ll read about some of the retail companies that are taking a leadership role in their approach to sustainability. In some instances, the spotlight is on renewable sources of energy; others have put the emphasis on recycling or the reuse of reclaimed materials in store construction.

This is by no means a definitive list. It would have been impossible, for example, to feature the efforts of The Home Depot on a single page. Since Earth Day 1990, the Atlanta-based home improvement retailer has worked to bring shoppers alternative, green products. In 2007, the Home Depot Foundation committed to invest $100 million over the next decade to build more than 100,000 affordable “green” homes and plant three million trees.

Similarly, it would be difficult to capture Tesco’s efforts around sustainability in a brief write up. The U.K. supermarket retailer has emerged as a role model, with CEO Sir Terry Leahy putting forth his intent to “create a mass movement in green consumption” by making it easier and more affordable for customers to buy green products.

Tesco’s strategy consists of greening the company’s operations and supply chain and empowering customers to make greener purchasing decisions. Earlier this year, the chain began labeling some 70,000 products to reflect the amount of carbon released in their production, transportation and consumption. At its U.S. Fresh & Easy Neighborhood Markets, the goal is to simplify green purchasing decisions by offering eco-friendly products at budget prices. These items included rechargeable batteries, reusable plates and cutlery and energy efficient light bulbs.

Just in the last six weeks there has been a flurry of green news reported about retailers.

J.C. Penney Company recently broke ground on a store in Fairview, Texas, that is expected to use 41 percent less energy than similar-sized stores. Recycled construction materials are being used and plumbing fixtures will reduce water consumption by 20 percent.

H-E-B opened a supermarket in the Houston area last month that has already been awarded LEED certification from the U.S. Green Building Council for its use of recycled materials and its commitment to conserving resources.

With energy consumption expected to double in five years and most costs continuing to soar, the time for retailers to address green programs across all aspects of their business is now.