Wal-Mart to double amount of solar energy use

For months, Wal-Mart (WMT) has defied the economic slump by posting relatively healthy earnings even as other retailers got pummeled.

Now, it's offering a bright spot in a wobbly renewable energy market.

Wal-Mart plans to announce for Earth Day on Wednesday that it will as much as double the size of its solar-power initiative in the next 18 months by putting rooftop solar arrays on 10 to 20 stores and distribution centers in California. The retail giant early this month finished installing solar setups at 18 Wal-Mart and Sam's Club stores and two warehouses in California and Hawaii.

"(Wal-Mart) is something of a bellwether," says analyst Nat Bullard of New Energy Finance.

The U.S. solar market showed healthy first-quarter gains in an otherwise bleak renewable energy industry, though some experts say that largely resulted from a 2008 order backlog.

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All of Wal-Mart's solar projects will generate enough clean energy to power the equivalent of 2,600 homes and avoid 22,500 metric tons of carbon-dioxide emissions each year — tantamount to taking about 4,000 cars off the road. The company is considering other sites for solar arrays.

As with the first batch of stores, Wal-Mart won't buy the solar setups outright. Under a 10-year power purchase agreement, or PPA, it will pay for the electricity it uses. BP Solar will make, install, own and maintain the systems.

Wal-Mart aims to buy the green power at prices equal to or less than traditional energy. The chain already has reaped a "moderate savings" with the initial projects, says David Ozment, Wal-Mart's energy director. Each store gets 20% to 30% of its power from solar.

"The pilot program led us to the point that we believe in solar," says Kim Saylors-Laster, Wal-Mart's vice president of energy.

A good time for solar?

The project is part of an aggressive environmental campaign Wal-Mart unveiled in 2005. The chain is among a bevy of retailers that announced solar projects the last two years, including Target, Macy's and Whole Foods. Most signed PPAs, which have exploded in recent years because they let large businesses buy solar energy without huge upfront costs or, more significantly, the hassles of maintaining systems. The set-ups comprise the bulk of the large commercial solar market, says consultant Larry Sherwood of the Interstate Renewable Energy Council.

"It really allows BP Solar to do what they do best, and it allows us just to focus on (store operation) and energy procurement," Ozment says.

Wal-Mart likely would have to spend more than $2 million per store if it purchased the solar setups, says Jigar Shah, a consultant and founder of SunEdison, the top solar services company.

Some say the PPA market has slowed recently along with the economy. Project developers are having a tougher time securing financing while many commercial customers "are focusing on their core business," says Arno Harris, CEO of Recurrent Energy, a leading PPA provider. Mom and pop merchants, in particular, are less likely to buy solar energy for one building, he says.

Another hurdle: Prices of fossil fuels such as natural gas have plunged, stabilizing utility electric rates. But Harris says "more sophisticated buyers" with multiple locations are moving ahead with projects, anyway.

Wal-Mart, for instance, recognizes electricity rates are bound to rise in coming years as fossil fuel costs rebound, while solar prices are stable as there are no fuel costs. "We really look for the longer term," Wal-Mart's Saylors-Laster says.

There are also deals to be had for those who want to pay cash. Solar prices have fallen 15% to 20% in recent months, Shah says. Meanwhile, Congress beefed up and extended federal tax breaks last fall, while states such as California and New Jersey continue to offer generous incentives.

'Significant' for California

For California, projects such as Wal-Mart's are key to helping the state reach its target of getting 33% of its power from renewable resources by 2020.

"We have a very aggressive agenda (for clean energy)," California Gov. Arnold Schwarzenegger says. "Anything that goes in that direction (such as the Wal-Mart deal), we find significant."

Renewable energy investment tumbled 50% in the first quarter vs. the year-ago period, New Energy Finance says. But the amount of new solar capacity announced jumped more than tenfold in the quarter, the firm says. Many are by utilities such as Pacific Gas & Electric that must meet ambitious state renewable energy standards. Meanwhile, first-quarter solar installations in California and New Jersey — which includes more than half the market — totaled 103 megawatts, vs. 151 megawatts for all of last year, Sherwood says.

BP Solar CEO Reyad Fezzani cites an order backlog from 2008 as customers struggled to get financing. That means the market is likely to slow the next few months before rebounding. Projects are "backed into late 2009 and 2010," he says.

USATODAY

$2 billion in bonuses coming to Wal-Mart employees

Wal-Mart Stores, Inc. (NYSE: WMT) has had one big, black eye in recent time that it just can't get away from: its relationship with labor. Wal-Mart's fiercest critics have pointed out many examples of the low pay, pricey health insurance, and low-end working conditions.

Are Wal-Mart workers really in that big of a bind, or does the largest retailer in the world have pay and benefit parity with all its competitors? When you're the biggest, you have the target painted on your back -- and Wal-Mart has been there for some time. However, the company has just announced a rather large bonus plan for its employees with a sizable target indeed: $2 billion dollars.

Hourly employees get a lift

One could say that Wal-Mart employees (mostly hourly) get the market rate for the jobs they perform. After all, do Kroger and Target employees enjoy a huge wage increase over their Wal-Mart worker friends? Doubtful. While Wal-Mart is the first to point out that it pays its employees well, many employees have taken the victim route and have joined the critics' circles. These critics state that Wal-Mart employees just can't get by with the low wages the retailer pays. In a country where almost everyone can have a choice to work, this entitlement mentality runs rampant in the Wal-Mart bashing industry.

On the flip side, those who claim many Wal-Mart employees are "forced" to work there or somehow be homeless (or the equivalent) take up the cause for trying to get the retailer to pay wages that would give workers a living wage. While "living wage" is a completely relative term, the basic needs should be covered: shelter, food and medical. If those three needs are not met sufficiently with a job's wages, then there's a problem. What to do?

Wal-Mart is raking in the dough

While many (if not almost all) retailers are struggling heavily through the current recession, Wal-Mart is the one who is growing and making money. The reason, which has been discussed ad nauseam in the last three months, is due to many millions of retail consumers "trading down" to get the best prices on everything they need every day, from tires to food to light bulbs.

As such, Wal-Mart will be shortly rewarding many of those store-level employees with cash bonuses. The total being given out? About $2 billion, according to the retailer. The bonuses won't just come in the form of cash, though: pension savings accounts are also included. While many retailers and companies have suspended matching 401k contributions in light of the economic crisis underway, Wal-Mart is increasing contributions using these bonuses.

The breakdown as given by CEO Mike Duke:

• $933.6 million in cash bonuses
• $788.8 million in profit-sharing and pension contributions
• Merchandise discounts and contributions to its employee stock purchase plan

Duke also wasted no time in comparing the current bonus level to 2008's level of $636 million in cash bonuses for 900,000 hourly employees. Additionally, the health care coverage given to Wal-Mart workers inched up from 92.7% in 2008 to 94.5% so far this year. So, what's not to like about Wal-Mart's generosity here? Any bonus -- even $50 per employee -- is a bonus. While critics may still argue that Wal-Mart's health insurance options are still too pricey for many of its employees, isn't some insurance better than none at all?

Why the open wallets?

At a time when the movement to unionize as many Wal-Mart locations as possible is underway, is Wal-Mart's increasing generosity indicative of an ulterior motive, or is it really part of a plan to share the corporate wealth to its employee base? We again have to think about whether Wal-Mart's worker treatment (pay and benefits) is on par with the competition's. Should Wal-Mart be held to a higher standard than its competition based on its standing of being the largest retailer on the face of the planet? If so, why?

Wal-Mart critics will surely see the retailer's bonus tactic here as a ruse intended to guide attention from potential collective bargaining movements. Wal-Mart workers, on the other hand, will welcome the bonus in all its forms with open arms. One thing remains clear: while large corporations are taking federal taxpayer money in the form of bailouts and paying large bonuses to executives and sending millions down the "perk" hole, Wal-Mart is giving back to its workers -- the exact opposite of the incredible greed currently gripping incompetently-ran, brink-like companies like AIG. That alone stands for something, and Wal-Mart's fiercest critics can't shake a stick at that.

BLOGGINGSTOCKS

Home goods looking stronger at Walmart

Walmart U.S. has finally gotten the assortment in home "where it needs to be," evp/coo Bill Simon told investors yesterday.

He pointed to the recent brand relaunches of Mainstays, Canopy and Better Homes & Gardens as redefining Walmart's good/better/best statement. "And product clarity along with the color this year, which is certainly on trend, is having a very big impact on the business," Simon said during the Morgan Stanley Arizona Field Trip here.

He also credited the company's "win, place show" strategy, identifying merchandising areas, where respectively, Walmart gains market share, balances growth and profit, and simply boosts efficiency.

Simon noted competitors have been pursuing price-driven marketing to drive traffic during the recession. "Welcome to the price game," he said. "That's ours."

HOMETEXTTILES

Wal-Mart Supports Communities Around the Globe With $423 Million in Charitable Contributions

    Company and its domestic and international Foundations increased
donations to charities by more than 25 percent over last year; anticipates
1.5 million hours of U.S. associate volunteerism this year

    BENTONVILLE, Ark., April 2 /PRNewswire-FirstCall/ -- While the economic
crisis continues to impact communities around the globe, Wal-Mart's
long-term commitment to giving back locally has made the company - and its
domestic and international Foundations - trusted sources of funding for
much-needed community programs, especially those that address hunger,
homelessness, education, job training and other basic needs.* The company
today announced that it stepped up charitable giving globally from February
1, 2008 through January 31, 2009 (FYE 2009) with more than $423 million in
cash and in-kind gifts, an $85.6 million increase over its global giving in
the previous year.

    "Now more than ever, our customers, our associates and countless
charitable organizations in communities around the globe are looking to
Wal-Mart to support those hit hardest by the financial crisis. But, we must
all work together to make a difference," said Margaret McKenna, president
of the Wal-Mart Foundation. "During these tough economic times, we know we
have a responsibility to continually look for ways to increase our giving
and focus our local contributions towards organizations that can do the
most good - and have a lasting, positive impact in communities around the
globe."

    Wal-Mart's FYE 2009 giving breakdown:



    --  In the U.S., Wal-Mart gave more than $378 million in cash and in-kind
        gifts, up from $296 million in 2007.
    --  In international markets, Wal-Mart gave $45.5 million in cash and
        in-kind gifts, up from $41 million in 2007.
    --  Globally, Wal-Mart's customers and associates gave more than $106
        million through in-store giving programs that benefit local charities.

    --  In total, Wal-Mart, its Foundations, its customers and its associates
        supported communities around the globe with nearly $530 million in
        charitable contributions during FYE 2009.
    In the U.S., Wal-Mart is standing shoulder-to-shoulder with those on
Main Street who have turned to organizations like Feeding America to make
ends meet. For example, Wal-Mart's food donation program has provided more
than 33 million pounds of fresh produce, meat and other nutritious foods to
U.S. food banks. These in-kind contributions have an estimated value of
more than $85 million. Walmart stores and Sam's Club locations remain on
track to donate 90 million pounds of food by November 2009.

    In addition, Walmart and Sam's Club associates in the U.S. donated more
than one million volunteer hours last fiscal year, evidence of the
company's on-going efforts to encourage community service. Recently, the
company expanded its volunteerism program through mywalmart.com, a new Web
site designed to help associates connect with one another, get involved in
their communities and find local volunteer opportunities. The Wal-Mart
Foundation also continues its Volunteerism Always Pays program, which
awards grant dollars to qualifying organizations in recognition of
associate volunteer hours. The company anticipates that associates will log
1.5 million volunteer hours this fiscal year.

    "More and more nonprofits are struggling to meet their operating
expenses and, as a result, are likely to cut staff," said Professor Andrew
Hahn, director of the Sillerman Center for the Advancement of Philanthropy
at Brandeis University. "Ultimately this translates into very difficult
times for the people served by nonprofits. Wal-Mart associates and
customers can continue filling gaps by volunteering in their local
communities - there are ways to give back, especially with your time and
skills, that don't involve writing a check. Help comes in many forms."

    While Wal-Mart is increasing efforts to help address changing community
needs, it continues to support U.S. initiatives focused on education,
workforce development, economic opportunity, environmental sustainability,
and health and wellness - all of which have historically been focus areas
for the company and its U.S. Foundation. Last year, Wal-Mart and the
Wal-Mart Foundation gave $248 million in those areas to numerous national
and local charities including the Institute for Higher Education Policy
($4.1 million), YouthBuild ($5 million), Children's Miracle Network ($4.7
million), The Salvation Army ($3 million), Special Olympics ($3.6 million),
the National Urban League ($1 million) and the National Fish and Wildlife
Foundation ($3.4 million). Wal-Mart also continues to support disaster
relief efforts and programs for military families.

    For a state-by-state breakdown of giving, or more information about the
Wal-Mart Foundation, visit http://www.walmartfoundation.org.
PRNEWSWIRE

Look for tighter inventory and cleaner stores at your local Walmart

Walmart has 21 minutes to get a customer's attention, from the time a shopper walks into a Supercenter to shopping aisles and checking out.

Customers find fewer types of products on Walmart shelves, as the company reduces inventory and changes store layouts to implement its "fast, friendly, clean" message.

Bill Simon, executive vice president and chief executive officer of Walmart U.S., delivered those points to analysts and investors Wednesday.

Simon spoke at the Morgan Stanley Arizona Field Trip in Paradise, Ariz. Simon's presentation is available at walmartstores.com.

Simon oversees more than 3,600 U.S. stores, including Walmart Supercenters, Neighborhood Markets and Marksetsides; and logistics and transportation, including 121 distribution centers.

Walmart reduced inventory, as the chain had $23.3 billion in inventory in fiscal year 2007, $23.5 billion in fiscal year 2008 and $23.2 billion in fiscal year 2009.

Less inventory in stores makes it easier to order products from distribution centers and easier for employees to restock shelves.

"It allows our associates more time to spend on a customer," Simon said.

Less inventory also makes it easier for customers to find items, Simon said.

Customers see uncluttered aisles and see signs more clearly. Walmart no longer puts pallets of pencils and paper and displays of diapers in "action alleys," the wide center aisles.

Removing the "action alley" displays means customers may cross aisles more often to shop other areas.

"You provide access and visibility for departments in the store that were previously difficult to shop, like apparel," Simon said.

Cutting inventory likely is a smart move in a down economy in which consumers lose jobs, see declining home values and lose value in their retirement accounts.

TNS Retail Forward, a Columbus, Ohio, research firm, surveyed 4,000 consumers in its August ShopperScape survey. About 75 percent of respondents reported changing shopping behaviors, including buying only essentials, shopping less often and even doing without some items.

That behavior means retail sales will remain flat throughout this year after sales grew 1.8 percent in 2008, according to Retail Forward.

Most Walmart stores have between 15 and 30 days of inventory, Simon said. Cutting inventory means logistics efficiencies, Simon said, as Walmart has not built a new distribution center in two years, despite opening more stores.

However, Walmart experienced inventory shortages some days in some areas, Simon said, and store management re-evaluated product assortment.

Still, having fewer products in a store reduces shrink, or theft; accident costs; and markdowns needed to get slow-moving or overstocked items out of a store, Simon said.

Walmart's new merchandise mix and store layouts gained praise from Richard Hastings, a Charlotte, N.C.-based consumer strategist with Global Hunter Securities LLC. Hastings does not make stock recommendations or set target stock prices, but Global Hunter Securities does.

Walmart is getting more foot traffic that was going to other stores, partly because of better merchandising and execution, Hastings said in early March.

Walmart is collecting data on how customers perceive the chain is living up to its "fast, friendly, clean" motto, Simon said, and is tying performance in that area to bonuses.

Walmart surveys about 500,000 customers each month, Simon said, and can break down data "nearly to the cashier level" to gauge what customers think.

The better the employee and store scores on the fast, friendly, clean rubric, the higher the bonus both hourly and management employees receive, Simon said.

Shares of Wal-Mart Stores Inc. (NYSE: WMT) closed Wednesday at $52.82, up 72 cents. The share price ranged from a $63.85 high to a $46.25 low in the past 52 weeks.
THEMORNINGNEWS