KANSAS CITY, Missouri (Reuters)

Wal-Mart Stores must be a “company of the future” that embraces advances such as electronic health records or hybrid cars to drive down costs, keep prices low and tackle issues the government may not be able to solve, its chief executive said on Wednesday.

“We live in a time when people are losing confidence in the ability of government to solve problems,” said CEO Lee Scott, according to a copy of a speech provided to the media.

“But at Wal-Mart, we don’t see the sidelines that politicians see. And we do not wait for someone else to solve problems that might hurt our business or affect our customers in a negative way.”

Instead, Scott said Wal-Mart will use its heft as the world’s largest retailer to push for changes in health care, energy consumption and sourcing.

Scott was scheduled to deliver the speech at a meeting for U.S. store managers held in Kansas City, Missouri.

It built on a speech he delivered in October 2005, when he first outlined Wal-Mart’s environmental efforts. While the goals, such as one day using only renewable energy and creating zero waste, are seen as a way to help the environment, they are also meant to help Wal-Mart cut costs.

Many of the goals Scott outlined on Wednesday were aimed at helping Wal-Mart strip out excess costs and promote low prices at a time when its core lower-income shoppers are being squeezed by a deteriorating housing market, higher food and fuel costs and a credit market crunch.

“We see our customers having to choose between filling up their gas tanks or buying food and medicine and clothes,” Scott said, adding that, in the United States, out-of-pocket energy costs for working families have doubled over the past decade.

“These families now spend an estimated 17 percent of their monthly income on energy. Somebody has to do something.”

He added Wal-Mart is working with its suppliers to make the most “energy intensive” products in its stores 25 percent more energy efficient within three years.

He also said that, by 2010, the retailer wants all its flat-panel TVs to be 30 percent more energy efficient.

On the health care front, he said Wal-Mart will partner with doctors to increase the number of electronic prescriptions that it fills in the United States to 8 million by the end of year. That would mark a nearly 400 percent increase in e-prescriptions filled at Wal-Mart, he said.

Wal-Mart will also provide electronic health records to U.S. employees and their family members by the end of 2010.

“These records will be personal, private and portable. They will drive down costs and improve quality and safety,” he said.

In the wake of a slew of recalls last year of Chinese-made products, Scott said Wal-Mart intends to be tough with suppliers

Wal-Mart will only work with suppliers “who maintain our standards throughout our relationship,” he said, adding that, in some cases, Wal-Mart may pay more to suppliers that meet its standards.

“Paying more in the short term for quality will mean paying less in the long term as a company,” he said.


In looking for ways that Wal-Mart could become a retailer of the future, Scott also offered some ideas he said were “completely out there”.

For instance, he has been talking with the heads of the major auto manufacturers, asking “if there is a place for Wal-Mart in the hybrid electric or plug-in electric car market, so our customers do not have to spend so much money filling up their gas tanks”.

“Maybe there isn’t room for Wal-Mart in this right now. But something tells me that there may be some role for us in the future and we are going to continue taking a look at this,” he added.

Wal-Mart could also try to provide “ecofriendly energy” to customers.

“Imagine your customers pulling into your parking lot and seeing wind turbines and solar panels, and being able to charge their cars while they shop,” he said.

Wal-Mart could then feed the power generated by its wind turbines and solar powers back into the electrical grid.

“Just imagine the impact of our customers being able to buy ecofriendly energy at the unbeatable Wal-Mart price,” he added.