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H-E-B airs green energy efforts with expansion of wind turbines

BY Jim Frederick

SAN ANTONIO H-E-B is extending its commitment to renewable energy and a lower carbon footprint with the installation of a wind turbine to help power its distribution center in Weslaco, Texas.

The 100-foot tower was erected near the warehouse this week, according to a report in the San Antonio Business Journal, using equipment supplied under a contract struck earlier this year with Wind Energy Corp. of Elizabeth, Ky.

The San Antonio-based supermarket and pharmacy chain is testing the feasibility of wind power to drive its stores and other facilities in south Texas. In April, CPS Energy, a municipally owned utility, revealed that H-E-B had signed on as its newest and largest customer for the installation of “Windtricity” turbines to help power its 46 stores in San Antonio and Bexar County.

“Using wind energy to help power our stores is a testament to sustainability being a priority for our business — to make a commitment to our environment is to make a commitment to our communities and to the generations of Texans to come,” said Dya Campos, H-E-B Public Affairs Director.

“Wind power is one of the oldest forms of renewable energy,” said Bill Reynolds, H-E-B vice president of facility alliance, earlier this year. “Thanks to new technologies, generating wind power as energy has become a viable alternative for us as we work to diversify the sources of energy we purchase.”

Under the pact with CPS, all H-E-B stores in San Antonio will run off of 10 percent wind power. All new H-E-B locations, including three new stores being built in 2008, will be powered with 35 percent wind power, or enough energy to power 2,200 homes for a year, according to the company. H-E-B said it will save 287 million pounds of CO2 emissions with the use of the wind turbines.

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Sara Lee debuts ‘fragrance free’ Endust

BY Doug Desjardins

DOWNERS GROVE, Ill. Sara Lee has added a new fragrance-free, hypoallergenic Endust spray to its line of aerosol cleaners. Endust Free debuted in August and will be in all retailers by the end of September.

The new product features a sleeker, curvier can, retails for $3.99 and is being promoted with the tagline ‘A quick clean that’s hypoallergenic.’ In addition to being free of odors, the product also contains fewer volatile organic compounds, a pollutant released by some aerosol products.

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Wal-Mart increases profit outlook

BY Mike Troy

BENTONVILLE, Ark. Despite ongoing concerns about the health of the U.S. and global economies, Wal-Mart today increased its full-year profit forecast after reporting record second-quarter results.

Total sales increased 10.4 percent to $101.6 billion and profits increased 9.3 percent to $3.385 billion, during the second quarter ended July 31. Same-store sales for the period increased 4.6 percent, excluding fuel sales, at Wal-Mart’s U.S. stores division and increased 3.7 percent, excluding fuel sales, at the Sam’s Club division.

“We have a great story to tell for this year’s second quarter,” said president and chief executive officer Lee Scott. “We continue to deliver on our mission of saving people money so they can live better. Each operating segment contributed to the quarter’s record sales.”

Wal-Mart’s great story also included mention of the health and wellness business as one of the six major merchandising units Scott said continues to gain market share in the United States.

“Our pharmacy prescription business has sustained high single-digit comparable-store sales growth,” said U.S. stores division president Eduardo Castro-Wright. “The $4 and $10 prescription program continue to drive pharmacy traffic. The $10, 90 day prescription offering resulted in a high double-digit fill rate increases.”

Other pharmacy details shared included what Castro-Wright called a, “substantial increase is pharmacy customers experience and faster checkout scores. The $4 or less price on more than 1,000 OTC products also generated strong customer response.”

Another area of emphasis on the call was about operational improvements that are driving improved financial results. Profits increased 14.6 percent to $0.86 per share from $0.75 the prior year, exceeding the company’s guidance that had been increased to a range of $0.82 to $0.84 on July 10. The company’s outlook for the third quarter calls for same store sales in a range of 1 percent to 2 percent and earnings per share of $0.73 to $0.76. Despite the modest outlook for third quarter comps, Wal-Mart boosted its full year earnings guidance to a range of $3.43 to $3.50 from guidance issued at the end of the last fiscal year of $3.30 to $3.43.

According to Scott, effective inventory management, especially in the United States and markets share gains in each of the company’s six major merchandising units contributed to an improved operational performance.

“Our company continues to manage cash flow in a way that will gives us the opportunity to participate in things that will benefit Wal-Mart long-term,” Scott said. “The combination of our strong operating performance coupled with strong capital efficiency allowed the company to report free cash flow through the first six months of almost $5 billion.”

Wal-Mart has been spending less money on opening new stores and also eased up on share repurchase activity during the second quarter. Wal-Mart added 73 stores worldwide and ended the second quarter with a total of 4,224 stores in the United States, including 2,572 supercenters, 915 discount stores, 594 Sam’s Clubs and 143 Neighborhood Markets. Internationally, Wal-Mart operates 3,192 stores in countries such as Mexico (1,074), Japan (392), the United Kingdom (346), Brazil (318), Canada (309), China (206), Costa Rica (154), Guatemala (147), El Salvador (74), Puerto Rico (55), Honduras (47), Nicaragua (46) and Argentina (24)

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