Can Wal-Mart save the world?
Wal-Mart CEO Lee Scott
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KAI RYSSDAL: There is a paradox that comes with all the spending that you and I do. This country's economic health depends on us buying more stuff every year. But more stuff is decidedly unhealthy in some other ways. Like what it does to the climate -- the strain it puts on natural resources, even how our buying habits affect our own bodies.
We've spent this past week tossing around questions about the consumer economy and whether or not it's sustainable. Here's one more to wrap your brain around:
Can Wal-Mart save the world?
TV COMMERCIAL: See this funny looking light bulb? I got it at Wal-Mart. It could save me $36 in electricity costs. But here's the really cool thing. If every Wal-Mart shopper -- all 180 million of us -- would buy one of these, it would be like taking a million cars off the road.
Think about it. Millions of customers. Thousands of stores. Legendary power to cut prices. Could work.
Here's what President and CEO Lee Scott told me last month:
LEE SCOTT: I believe that we can put a vehicle on the street that is the best solution to sustainability.
Wal-Mart, in the car business. But I'm getting ahead of myself.
Two years ago this fall, during a meeting of Wal-Mart employees in Bentonville, Arkansas -- meetings that resembled pep-rallies in more than a couple of ways -- the world's biggest retailer promised a sustainability overhaul... It embraced everything from renewable energy to zero waste. To be honest, most outsiders back then thought all the hooplah was just that.
ANNOUNCER: Ladies and gentlemen, please welcome your President and Chief Executive Officer Lee Scott!
But at this year's shareholder's meeting, Lee Scott said the company's right about where it should be.
SCOTT: We will sell 100 million energy-efficient compact fluorescent light bulbs in the U.S. alone this year.
With Wal-Mart's daily sales approaching a billion dollars, we figured where better to wrap up a week of talking about consumption and its sustainability than Bentonville. So I got on a plane for Arkansas to talk to Lee Scott and see how his plans are working out.
SCOTT: This store looks good today, doesn't it?
The first thing you need to know about Wal-Mart Supercenter Store number 5260 is that it's Lee Scott's local store. So you ought to consider that when you picture it in your mind. Spic and span clean. Those Wal-Mart greeters maybe a touch more friendly than at other stores.
The other thing to know is that Lee Scott's not as crusty as his company's reputation. He's personable and folksy. He shows up right on time for our appointment at 7:30 on a Monday morning. Loafers, sport coat, no tie, carrying a McDonalds cup of coffee as we walk the aisles for a little show and tell.
Scott: These lights now on our freezer compartments ...
Ryssdal: Oh, look at this. They're actually coming on as we walk through.
Scott: They come on as you walk through, and so you have the electrical savings there.
The long rows of freezers with motion-sensor lighting are just one example. Scott's promised his new stores will use 30 percent less energy than older ones. Then there are the products themselves.
Scott: Let's see where the Hamburger Helper is. And they simply straightened the noodles out. And the noodles, therefore, nest better.
Wal-Mart's been aggressive in reducing packaging. For everything from Hamburger Helper to laundry detergent to breakfast cereals. Shelf after shelf after shelf of breakfast cereal.
SCOTT: One of the things they're working on is right here. This space ...
Ryssdal: Right. Right. Because this all settles in transport.
Scott: ... in a box of cereal.
Ryssdal: You've got 3 inches of this in a big Fruit Loops box that's just wasted space and cardboard.
scott: And that is where the cereal companies are working back through that very issue to give you the same tactile feel and the same storage ability, but to take that space out. Makes a huge difference.
Here's how huge. Wal-Mart claims that by pushing its 60,000 suppliers to cut their packaging by 5 percent, it'll take 213,000 trucks off the roads, and save 67 million gallons of diesel fuel a year.
Ryssdal: All right, we never did find the Hamburger Helper.
Scott: All right, let's go see Hamburger Helper.
Two million people work at Wal-Mart.
SCOTT: Oh, Mr. Murphy, how are you, sir?
Mr. Murphy: Great! Yourself?
SCOTT: I'm doin' good!
Six-hundred-thousand of them have taken a personal sustainability pledge to go green at home as well as work. And if each one of those 600,000 brings a couple family members on board...
SCOTT: How come we can't find Hamburger Helper.
...then the company's daunting size delivers another payoff.
Ryssdal: Pies ... pies ... canned meats ... spaghetti sauce. It should be here.
SCOTT: It should be right in here.
Ryssdal: We've got Rice-a-Roni.
SCOTT: Oh, here, it's back here. Do-do-do-do.
Ryssdal: Eh, canned goods. Well.
SCOTT: All right.
Scott claims no personal motivation for all this change. He says there wasn't an ah-ha moment for him. Just a realization that the company had to take advantage of its size to do something about sustainability.
But once the relatively low-hanging fruit is gathered, like making those elusive boxes of Hamburger Helper even a little bit smaller, is Wal-Mart ready to put any money where Lee Scott's mouth is?
SCOTT: We're not going to go out and outfit every individual store with solar energy panels or wind turbines.
Ryssdal: Why not?
SCOTT: Well, because economically there is no payback at this point to go out and do the entire chain.
So, a reality check. Wal-Mart is still Wal-Mart.
SCOTT: Yeah, this is not an altruistic endeavor.
That, critics say, is Wal-Mart's essential core. And why some think the company's efforts are doomed to fall short. No matter how many millions of people walk in the door looking for those everyday low prices. When we sat down to talk, I asked Lee Scott about that.
RYSSDAL: Let's talk about those customers. You have 176 million of them a week. The way most of them do that is pile in the car and drive three, five, eight, 10, 12 miles, spewing out carbon dioxide and all those sorts of things. How do you take care of the downstream part of sustainability if you're Wal-Mart?
SCOTT: Number one is because when you come to the supercenter, you're making one trip. And quite honestly, you can buy everything you need for life on that one trip.
Ryssdal: But that's not the way people drive, right? They make two, three, five trips a week. If you take these stores, put them on the fringes of a suburban area, make people drive to them, is that model in and of itself, then, sustainable?
SCOTT: I think it's totally consistent. We believe that upstream what we do in logistics, what we do with full trucks, what we do in managing the total electricity across the supply chain actually will be hard for individual small stores to make that same kind of investment and have the same kind of impact on the environment.
Ryssdal: The size and the scale that this company operates at really imposes incredible opportunites. Play that out for me, and what's on your mind when you guys sit around and just spitball ideas?
SCOTT: We have Sam's Clubs, which we have not talked about. Sam's Clubs has fuel; Wal-Mart does not have it's own fuels. There's an opportunity for Sam's Clubs to set up national networks, whether it be with hydrogen or whether it be with alternative fuels in different ways. We believe that we could have a path of alternate fuels that would take you, let's say, from Detroit to Washington, D.C., fueling only at Sam's Clubs.
Ryssdal: You have the ability, by your decisions that you make on a daily basis, to literally create a market.
Ryssdal: What's next?
SCOTT: The president of Sam's Clubs thinks there's an opportunity to participate in highly efficient vehicles of some kind. So, how does that work? I think we can play a role in facilitating those technologies, not in necessarily owning those technologies, but in facilitating the use of those technologies.
Ryssdal: Is there anything that's off the table that you're just not interested in thinking about our trying?
SCOTT: Ah.... no. The only thing we're not interested in trying is closing all of our stores and thinking somehow that's better for sustainability.