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Sun 1 Apr 2007 05:36 PM

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Eye on the environment

While international hypermarket groups are vying to prove their green credentials, retailers in the Middle East seem less enthusiastic.

Environmental issues, particularly global warming, have moved into the mainstream of public opinion in the past couple of years. And international hypermarket groups have responded quickly to these concerns by implementing green initiatives, such as opening energy efficient stores, starting recycling schemes and raising awareness of the environment among customers.

Wal-Mart is one case in point. While the company has long been criticised for its out-of-town centres, which generally consume more energy than regular stores and leave people with little choice but to drive, the retailer has more recently been recognised for spearheading several green initiatives. For example, it recently started a campaign to increase sales of energy saving, compact fluorescent light bulbs (CFL), and it aims to sell 100 million units by 2008.

Andy Ruben, Wal-Mart's vice president for corporate strategy and sustainability, describes the initiative as "a small change that will add up to big results." He added that if every American swapped just one conventional bulb for a CFL, it would collectively save them more than $8 billion in energy costs and keep two million cars worth of greenhouse gas emissions from entering the atmosphere.

The company also recently opened its second high-efficiency Supercenter in Rockton, Illinois. The store is expected to use 20% less energy than a typical, energy hungry, Wal-Mart Supercenter. The energy efficient store, which is the second of four to open this year, features integrated heating, cooling and refrigeration systems, and energy saving lighting to conserve energy.

Wal-Mart is certainly not alone. Numerous other hypermarket players in the USA have been experimenting with alternative energy sources such as solar and wind power, as have retail groups in Europe.

Sir Terry Leahy, chief executive of Tesco, the UK's biggest supermarket group, also recently outlined his company's commitment to the environment. Tesco intends to cut its energy consumption per square foot to half of its 2000 levels by 2010. In another initiative, the company is encouraging its customers to consider the energy consumption involved in producing and transporting the products they buy. To this end, the retailer is planning to label its products to show their ‘energy foot print'.

"We are going to give our customers clear information about the carbon cost of the products they buy," Sir Leahy said recently. "That's why we have started the quest for a universally accepted and commonly understood measure of the carbon footprint of every product we sell - looking at its complete life-cycle from production, through distribution to consumption."

A number of retailers, and some governments, are also attempting to cut waste by encouraging consumers to use fewer plastic carrier bags. While taxes are levied on the bags in countries including Germany and Ireland, many retailers in the UK are also encouraging people to re-use or recycle bags, by offering points on loyalty cards and other incentives.

Similar schemes have also made headlines in the Middle East in recent months, with Carrefour and Spinneys both launching their own initiatives to cut the use of plastic carrier bags. Carrefour is offering customers the chance to buy re-useable bags for AED2, which will then be replaced for free if they wear out. Spinney's said it will introduce re-usable bags, and it already has recycling centres in three of its locations across Dubai. But without any real incentives for customers to re-use bags, and with a lack of awareness of the issue, such plans are likely to have little impact.

Aside from these small initiatives, retailers in the Middle East appear to be far less concerned about their environmental impact then their counterparts in Europe and the USA, and other Western countries. For Himanshu Vashishtha, country manager for the UAE with the Nielsen Group, a market research organisation, the problem is that amid unprecedented growth, retailers in the Middle East have more pressing issues to consider.

"The Gulf economies are facing bigger challenges now and though they recognise that the environment is an important matter, it is not really a priority, it is about getting the infrastructure in place," he told
Retail News Middle East

. "There are more immediate pressing issues that they are focusing on. Therefore it is not getting the kind of attention that is needs."

Furthermore, corporations usually need to feel pressure from consumers and governments before they act, and in the Gulf, this pressure is not yet strong enough, Vashishtha said. "For corporates or individuals to act, there needs to be incentives. There needs to be a pro-active measurement by the government to incentivise corporates to show environmental friendliness in a tangible manner."

Jim McCallum, director of Al Futtaim Group's retail division is also keeping a keen eye on enviromental issues. This is partly because McCallum oversees Al Futtaim's Marks & Spencer franchise operations in the region. In the UK, Marks & Spencer recently announced a plan to become carbon neutral by 2012, and McCallum thinks aspects of this will also apply to Al Futtaim's M&S franchises. "As a franchisee we are obliged to sign up to the corporate social responsibility charter and that will become part of it," he said. While McCallum is waiting for a franchisee conference in May to discover more how the plan will affect his stores, he is upbeat about the initiative. "It's a very exciting challenge that they've set. It is right in tune with what a lot of people worry about and so the fact that they're taking a lead in addressing those things is a sign that they are well in tune with their customers."

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