Wal-Mart tests hybrids

A Wal-Mart Supercenter

Wal-Mart Stores Inc. (NYSE: WMT) announced plans on Monday to test four new types of hybrid and alternative-fuel heavy-duty commercial trucks. The announcement comes as another step toward Wal-Mart’s pledge to double its fleet efficiency by 2015 from a baseline the company set in 2005.

A smorgasbord of trucks is slated to land in several locations throughout the United States. A dual-mode diesel-electric Arvin Meritor (NYSE: ARM), which is thought to be the first of its kind, is headed for the Detroit area. Fifteen trucks near Phoenix are being converted to run on reclaimed grease fuel made with waste cooking oil from Wal-Mart stores. The remaining trucks from the Phoenix distribution center run on an 80/20 blend of biodiesel made of reclaimed yellow grease waste. 

Five Peterbilt Model 386 hybrid trucks with diesel-electric hybrid power systems developed by Eaton Corporation (NYSE: ETN) and PACCAR (Nasdaq: PCAR) are being sent to Dallas, Houston, Apple Valley, Calif., Atlanta, and the Washington/Baltimore region. Four Peterbilt Model 386 trucks and one yard truck that run on liquid natural gas will operate out of the Southern California distribution center.

With more than 7,100 stores worldwide and more than 4,000 in America, Wal-Mart improved the efficiency of its private fleet by more than 25 percent between 2005 and 2008, surpassing one of its own stated goals. The company attributes its success to the use of new technologies, better delivery routes and more efficiently loaded trailers. 

In related news, Wal-Mart’s new CEO Mike Duke assumed his role Feb. 1, 2009. Duke, who has been with the company since 1995, asserted during a conference on his first day on the job that efforts such as cutting waste and energy use and requiring suppliers to do the same would continue under his leadership. He also guaranteed that prices would remain low.

Duke’s predecessor, Lee Scott, will serve as chairman of the board’s executive committee.

The recession is starting to hit discount retailers such as Wal-Mart and Costco. While the combined U.S. sales of Wal-Mart and Sam's Club (the company's warehouse division) rose 5.2 percent in the fourth quater (Q4) of 2007, both companies reported lower-than-expected sales during the 2008 holiday season.

While Wal-Mart is not expected to report its Q4 2008 earnings until Feb. 17, Tom Schoewe, Wal-Mart's executive vice president and CFO in a Jan. 8 press release said Q4 sales were "trending below" the company's expectations and expenses are "higher than anticipated."