Putting the 'Green' in Walgreen


Walgreen Co (NYSE:WAG) is getting behind the "green" part of its name, as it aims to build what it believes will be the first store in the United States to produce at least as much energy as it consumes.

The largest U.S. drugstore chain is preparing to build the "net zero energy" store in Evanston, Illinois, less than 20 miles from its headquarters in Deerfield, Illinois. That location provides relatively easy access for its engineers to measure the store's performance.

Continue Reading Below

From building stores with recycled materials to investing in solar power, a host of U.S. retailers including Home Depot Inc (NYSE:HD) and Best Buy Co Inc (NYSE:BBY)have stepped up efforts in recent years to become more environment-friendly.

The green trend began in earnest in 2005, when Wal-Mart Stores Inc (NYSE:WMT), under fire for its labor and healthcare practices, latched onto the issue. The world's largest retailer has since installed solar panels at many stores, forced its suppliers to reduce the size of their packaging and made its trucks more fuel efficient.

Before it builds the store, Walgreen must finish demolishing a 20-year old version of its drugstore that the net zero store will replace. The vast majority of the existing structure will be recycled, Walgreen said.

Walgreen aims to reduce energy usage by 20 percent across all of its more than 8,000 stores by 2020. Energy usage at the net zero store should be about 40 percent lower, and the store will also generate electricity through a variety of efforts.

Those include installing more than 800 solar panels on the roof and two wind turbines. It will also drill 550 feet into the ground below the store, where temperatures are more constant and can be tapped to heat or cool the store in winter and summer, for geothermal energy. The store will be built with energy-efficient materials, it said.

Estimates suggest the store will use 200,000 kilowatt hours per year of electricity while generating 256,000 kilowatt hours per year, Walgreen said, noting that those estimates vary due to weather and other factors.

While it will cost significantly more to build this type of store up front compared with a typical store, Walgreen expects to recoup those added costs over time. It also hopes to learn from the test and then implement more energy-saving practices in its future stores.