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Wal-Mart, Home Depot Go Green

The two giant retailers will try to cash in on environmentally friendly products.
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Two retailing heavyweights went for the green Tuesday, as they unveiled environmentally friendly initiatives.

Wal-Mart

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, the world's largest retailer, and

Home Depot

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, the world's largest home improvement retailer, both announced plans to make it easier for consumers to identify environmentally friendly products.

Wal-Mart said it hoped to get a reading of consumers' attitudes and shopping behavior through its "Live Better Index," which will track purchases of five products: compact fluorescent light bulbs, organic milk, concentrated/reduced-packaging liquid laundry detergents, extended-life paper products and organic baby food.

The company said it chose these items because consumers can make a conscious decision to buy them for their environmentally friendly and cost-savings benefits, compared with conventional versions of the same product.

Home Depot said it was launching its Eco Options program, which enables customers to easily identify products that have less of an environmental impact.

The company said it identified more than 2,500 Eco Options products, including all-natural insect repellents, front-loading washing machines and organic plant food and vegetables in biodegradable pots.

The compact fluorescent light bulb, or CFL, figured prominently in each company's plans. Home Deport promised to give away 1 million of the energy-saving bulbs at its stores on Earth Day, April 22, as part of its Eco Options launch, and Wal-Mart has pledged to sell 100 million CFLs.

So is going green a bright idea for retailers? Scott Rothbort, founder of LakeView Asset Management and a contributor to

StreetInsight

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dismissed the companies' actions as a publicity stunt.

"Come on," he said. "Be serious. Is there a contractor in the world who's going to walk into a Home Depot and say, 'give me the environmentally friendly stuff'? (The companies are) just jumping on the Al Gore global warming bandwagon."

Rothbort said that if he were an investor in these companies, he would be concerned that "they're spending more of my money to sell the same product."

Craig Johnson, president of Customer Growth Partners, said consumers are more aware of environmentally friendly products now than they have been in the past, so it is a good time to try and sell them. But he also said the two companies can benefit in other ways by going green.

"Both companies have had challenging public relations problems," he said, referring to the departure of controversial former Home Depot CEO Robert Nardelli and Wal-Mart's labor issues and lawsuits connected to the firing of a former marketing executive.

"Frankly, Wal-Mart has been outpaced in many ways by

Target

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and

Costco

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," he said. "One of the classic PR strategies is to be seen as a good citizen in other areas."

Johnson said the move toward green products is of marginal importance to the investor.

"It's not going to change a $50 stock to a $75 stock," he said. "From an investor point of view, it's a positive, but it won't make or break them."

Shares of Home Depot were trading up 78 cents, or 2%, to $39.34, while Wal-Mart was slipping 11 cents to $47.96 recently.