BY LEE COKER

Whole Foods (WFMI)
HIP practices: Perishable items comprise 67% of sales, meaning fresh food for customers. As the first mover, Whole Foods proved large demand for quality fresh foods, sparking food retailers to offer more organic, artisan, and/or local products – a benefit for more customers than they serve directly (though a multi-year erosion on shareholder value).

Not-so-HIP practices: While making the largest wind-energy-credit purchase in the history of North America and offsetting 100% of its electricity use, Whole Foods refused to release the exact cost of the credits. A comparable purchase of offsets on Terrapass would cost $4.2 million. From a shareholder perspective, Whole Foods might have earned a higher return (and reduced energy demand) by investing those funds in their own clean-energy generation systems (like rooftop solar and wind farms).

Safeway (SWY)
HIP practices: Safeway’s Food Flex program allows a household to quickly and easily view their grocery purchases, benchmark their performance against USDA guidelines, identify healthier food alternatives in specific grocery categories and create a personalized shopping list to achieve their nutritional goals – boosting customer health and loyalty simultaneously. Expect continued growth “O Organics” and “Eating Right” brands, both of which have contributed to over $400 million in sales in 3 years and are available at all stores nationally.

Not-so-HIP practices: CEO Steve Burd has been compensated over $108 million in the past five years and currently ranks as the 14th highest paid CEO by Forbes magazine while only the 167th most effective.


Wal-Mart (WMT)
HIP practices: Walmart is beginning to rate and rank suppliers with a scorecard tracking sustainability, weighting those factors alongside price, quality and service, and shifting the mix of products that is merchandised in their stores. With 60,000-plus suppliers globally and 85% of their goods coming from China, a sustainability scorecard is shifting global businesses towards more eco-friendly products and packaging – at lower prices for consumers.

Not-so-HIP practices: Mandatory meetings conducted this year suggest to store managers and department supervisors (hourly employees) that a vote for a Democratic president could mean no choice on joining a union, higher costs for Wal-Mart, and possible loss of Wal-Mart jobs.

Kroger (KR)
HIP practices: Kroger sources $1 billion annually from minority or women owned business; and employee a chief diversity officer who manages supplier and employee diversity initiatives.

Not-so-HIP practices: Kroger’s Board rejected a 2006 proposal by shareholders, the Nathan Cummings Foundation, to conduct an independent assessment on Kroger’s baseline (GHG: greenhouse gas) emissions and what the company could do to lower the overall level. – and hence future potential liabilities.

Tesco, including Fresh and Easy (TSCDY)
HIP practices: In the U.K., Tesco’s local sourcing procures 3,000 products worth $780 million in 2007 revenue, with goal of $2 billion by 2011. Tesco is currently testing a carbon labeling system on varieties of orange juice, potatoes, energy-efficient light bulbs, and washing detergent, stating the quantity in grams of CO-2 equivalents polluting the atmosphere by their manufacture and distribution.

Not-so-HIP practices: Tesco seems pretty HIP to us…do you have thoughts about what they need to improve upon? Add your comments and let HIP know.