Project Overview

Sustainability Trends in European Retail reports on what retailers are doing to address the big environmental and social challenges of our time and how they are aiming to derive financial value from these activities. The work was sponsored by manufacturing and distributing company Coca-Cola Enterprises Ltd, based in the UK.

We interviewed top names in supermarkets, food provision and forecourt retail – Albert Heijn, Asda, Casino, Colruyt, Compass, Delhaize, Intermarché, Metro, Morrisons, Sainsbury’s, Subway, Shell, Tesco and Total – to find out about their priorities and where they think sustainability is heading.

Our research indicates that, across Europe, sustainability is high up the agenda for retailers in all three markets we tested, with the business environment and the retailers’ perception of their own marketplace power proving to be the most significant drivers.

Key findings:

1. Underlying factors that influence retailers’ approaches

The sector divides itself into two classes of sustainability performer – contributors and leaders, depending on how confident retailers are in their ability to influence consumers and suppliers.

Leaders are more likely to impose strict sustainability criteria on their supply chains and consider indirect, as well as the direct, impacts of their services. They also act more proactively towards their consumers, supplying more sustainable products.

Contributors concentrate on managing down their direct environmental footprint and on working with own-label products to reduce impacts. They provide consumers with as much choice as possible, providing information on sustainability issues, rather than rationalising their product lines.

2. Success strategies

Ultimately, retailers need to unlock what sustainable value means for their consumers – not just in terms of price, but also quality and a wide range of other characteristics. To do this, marketing departments will need to seize the opportunity to engage consumers on the ‘sustainable value’ argument, rather than the quick win issues – such as packaging, and plastic bags.

The retailers in our study predicted that the brands and manufacturers who can find and explain this ‘win-win’ to their consumers will be rewarded.

3. The top priorities for retailers across Europe today

Whilst ambition and speed of progress may vary across the retail sector, there is little significant difference in the actual issues retailers focus on.

Carbon is king - everyone is talking about, and acting on, carbon emissions. Packaging, waste, and the wellbeing agenda are also prioritised by retailers, but carbon management and reduction come in at, or near the top, for all.

4. Looking ahead: what retailers see coming

Whilst significant advances have been made on sustainability over the last decade, this is still an evolving agenda. The retailers in our study recognise that future issues will be more complex and touch every stage in the value chain.

On water, most retailers are still only considering their direct rather than indirect usage, focusing on improving efficiency on site. It is likely that this agenda will shift rapidly as it becomes the first real area of climate change impact. Despite the major risks for the supply chain there is little evidence of a systematic approach being taken on embedded water and risk mitigation.

5. Viewpoint from Forum for the Future

Overall the role of retail in promoting and enabling sustainable consumption has yet to be cracked. Current attention and effort focus mainly on making today’s retail models as sustainable as possible. There is less activity on coming up with new retail business models.

To fully unleash the power of the consumer in the transition towards greater sustainability, retailers and manufacturers need to show consumers the way and do two things: improve the sustainability credentials of key products across supply chains, and make active efforts to promote more sustainable choices.

For further information: contact Dan Crossley

Links
The Grocer - 'Sustainable suppliers favoured by retailers'