Retailers go green to cut costs

By Nicole Maestri - Analysis

NEW YORK (Reuters) - For retailers, going for the green means going for the greenbacks.

That was the point hammered home at the National Retail Federation convention in New York this week.

Many retailers at the conference were touting their environmental efforts, from building stores with recycled materials to installing low-flow water faucets and investing in solar power, as benefits to the bottom line.

Meanwhile, some experts said going green would eventually become the only feasible route as energy costs skyrocket and regulators -- both federal and local -- take a hard look at businesses' environmental efforts.

The green trend began in earnest in 2005, when Wal-Mart Stores Inc (WMT.N), under fire for its labor and health-care practices, latched onto the issue.

The company has since announced far-reaching goals, saying it eventually wants to use only renewable energy, create zero waste and sell products that sustain resources and the environment.

It opened two stores in 2005 to experiment with ways to cut waste, studying everything from recycling french fry oil to testing wind power, in hopes that successful technologies could be incorporated at other stores.

While critics said the moves were designed to improve its image, Wal-Mart, with more than 4,100 U.S. stores, has insisted they will improve operations and cut costs.

"We're going to take waste out, cost out and make our business more efficient," said Leslie Dach, executive vice president of corporate affairs and government relations.

Even little changes can mean big cost savings, Dach said. For instance, an employee suggested the retailer could turn off the lights in its break-room vending machines.

"We discovered that if you took out those light bulbs, we could save $1 million a year in our electricity bill," Dach said. "No surprise that we went ahead and we did that."

PERVASIVE CULTURE

Suzanne Malec-McKenna, a commissioner with the Chicago Department of the Environment, emphasized at the conference that "green can be green."

Studies have shown consumers prefer shopping in a "vegetated" area, she said, such as in stores that have trees outside.

"If you're attempting to add green to your business on the outside," she said, " ... you're going to drive more business to you."