Retailers Walking the Talk
By Bernice Hurst, Managing Partner, Fine Food Network
Consumers may be getting increasingly cost-conscious but retailers on both sides of the Atlantic are standing by their commitments to energy conservation. In the U.K., department store chain Debenhams has signed a deal with energy-providers, Scottish Power, to provide electricity for its 172 stores by wind power.
The Independent newspaper reported, “Debenhams will be supplied with 35 MW of green energy per month, enough to light and heat 50,000 homes.”
Debenhams’ spokesman, Nigel Palmer, explained, “This agreement to power our stores with 100 percent green electricity is part of a long term strategy which reveals the commitment that Debenhams has in helping the environment. We are going about this in a systematic manner and looking at all aspects of our operations from the way we deal with customers in stores to our distribution network. We will be seeking to continually improve our green performance by setting new targets for our 20,000 staff to meet.”
Scottish Power describes itself as “the leader in developing wind power and at the forefront of other renewable sources such as wave and tidal.”
Across the U.S., J.C. Penney, H.E. Butt Grocery, Safeway and Best Buy are among those implementing plans to use, and conserve, energy. H.E. Butt and Penney are working towards awards for environmentally-friendly design. Safeway has opened its “first solar-powered store in California” and Best Buy announced plans “to reduce its greenhouse gas emissions by nine percent per square foot across all its U.S. operations by 2012,” according to
The Dallas Morning News.
Penney’s chairman and chief executive Myron “Mike” Ullman said new ideas, including “solar and wind power projects in California, New Jersey and Colorado, eventually will cost less to implement and will lower operating costs.”
If these stores are anything to go by, it’s beginning to look as if more retailers are walking the walk and not just spouting greenwash.
Discussion question: What’s the likelihood that energy-saving investments by retailers will continue despite the tougher economic climate? Do you see these moves toward environmentally-friendly designs at retail more as cost-cutting measures, consumer goodwill initiatives, or just corporate citizenship efforts?
A lot of this is just feel-good talk so the retailers can get written up in the trade papers as being “green.” Using wind-powered electricity is just based on faith. You can’t tell the difference between the electricity in a store that comes from wind power or a coal-fired plant. If making adjustments results in lower costs and higher ROI, then obviously it’s a good idea.
If retailers cannot improve their bottom lines with these initiatives and put more money in the pockets of investors, then what’s the point? Most consumers and investors could care less about goodwill and corporate citizenship. For privately held retailers, this is just fine because it only affects the finances of a small group of investors.
Will the investment in sustainability outpace the cost of the self-congratulatory public relations campaign?
I think American customers should demand energy independence from the places where they do business and force retailers to stay on track. In capitalism, customers have power and they need to understand how to use it. American consumers should buy more socially and environmentally responsible, American job-sustaining products.
Energy conservation is a long term commitment. For example, it takes time to examine a product’s complete life cycle, not just whether the packaging is recyclable. And that takes time for consumers to understand as well.
No doubt the economy is number one now, but energy saving investments should pay off in the long run. And it will be interesting to see if and how a new President will embrace and encourage energy conservation.
In a tougher economic climate, it is important to attract as many customers as possible. The message about good citizenship that this sends to customers may enhance loyalty to the retailer and attract new customers to their outlets. It may drive consumer choice to use a retailer. In tough economic times, that additional edge–or any additional edge–is likely to be of value.
The green movement is here to stay and for good reason. It’s just good common sense as humans, consumers demand it, and in the mid and long term, it produces a better bottom line.
A while back we came across a company called LivClean (www.livclean.ca) who offers retailers an innovative way to offset their carbon footprint easily. And we continue to see more retailers and suppliers doing what can only be determined to be the right thing to do.
You can’t just be in business anymore to make money. That’s antiquated thinking. Employees and consumers are right in demanding that retailers and all businesses give back, and in the process of making money, don’t plunder the environment, or labour pools in foreign markets.
Projects with short term ROI will continue. Major projects with payout over years will go on the back burner. I think this is kinda common sense.
I am uncharacteristically optimistic that most of us will stick with the efforts for alternative energy this time–but for an old familiar reason. It is going to become cost effective.
I’m not sure whether T. Boone is right that America’s plains corridor has more wind than the coast of Scotland (if you listen to any Dougie McClane tune you will know Scotland has plenty of wind!) but he is on the trail of wind and CNG for one simple reason–he’s invested in it.
Another uber-investor from the oil patch–Richard Rainwater, wrote a few years back that he is investing in shale oil and oil sands for this decade, CNG for the next. And for the 2020s? He’s buying water rights.
Energy and natural resources are, along with limited government per yesterday’s discussion, the key to our continued prosperity. We’re going to be just fine, and retailers are going to be in the front of the herd–particularly on alternative energy–because it is so visible to their image.
A bit cynical? Sure. Done to enhance image, thereby driving traffic, sales, and profits? Sure. A pretty package wrapped around a real cost reduction? You bet. Will it work? “Ubetcha Red Ryder!”
Priorities change as the world turns day to day and I believe that right now, many retailers are focused in on the economy, sales, turns, jobs, and profitability a little bit more than on saving energy.
I think that the “Green Power” efforts of retailers are admirable but at the end of the day many of these initiatives, which can be cost intensive to get running and have a lengthy return on investment, will fall by the wayside in lieu of more quick impact projects. Adopters of green policies will be retailers who have discovered that it matters to key segments of their customer base, and are able to improve their brand positioning and perform a social good at the same time.
For retailers who do not see an immediate customer benefit to “going green,” the truth is they are unlikely to “walk the talk” with respect to being good environmental citizens until after the economic downturn.