Wal-Mart Cuts Out the Middleman Again
By George Anderson
Nobody cuts out costs — or the middleman — like Wal-Mart. In a move reminiscent of what it has done in so many areas before, the world’s largest retailer has sidestepped the regional utility companies in Texas to buy its electricity directly on the wholesale energy market.
A report on the Forbes.com Web site says Wal-Mart spends approximately $100 million a year for the electricity it needs to operate its 295 stores in the state where Kinky Friedman would be governor.
Although Wal-Mart is not sharing how much it has saved by going around the utilities, the director of the project, James Stanway, has said, “It’s significant enough that we’ve created a subsidiary company (with a 30-person staff). We have no intention of canceling the test.”
Wal-Mart is looking into expanding its energy-buying concept into other states where it operates including Arkansas, California and Louisiana. According to the Forbes‘ report, Wal-Mart spends approximately $1.1 billion a year for the electricity it needs to run its 5,100 stores worldwide.
The retailer says it has no plans to get into reselling the energy itself.
Moderator’s Comment: What do you think of Wal-Mart’s latest attempt to reduce costs? Will more retail companies follow Wal-Mart’s lead by purchasing
electricity directly on the wholesale energy market? –
George Anderson – Moderator