Doing good is good for business

All the indications point to sustainability becoming an increasingly important factor in running a modern convenience store – but building a more sustainable business can be just as good for the bottom line as it is for the environment, finds SLR.https://www.slrmag.co.uk/sustainability-good-for-business/

by Antony Begley

It’s famously said that there are very few guarantees in life – death and taxes aside – but to that list local retailers can confidently add quite a few others including a steadily increasing National Minimum Wage, constantly increasing tobacco levies and a raft of new (possibly well-intended but often) misguided legislation.

One issue that can also be added to the list of things that are not going to go away is sustainability. This is a complex, nuanced issue for local retailers but there is little doubt that both market forces and legislation will mean that local retailers will increasingly have to build sustainability into their core strategy, rather than treating it as the ‘nice to do’ issue that it has generally been for last four or five years.

Yes, we’ve all added LED lights and food waste bins, but those have been driven by legislative changes. And yes, lots of stores have added energy-efficient refrigeration with closed-door chillers now seemingly the norm in major refits, but the fact remains that much of this work has been done almost reactively – rather than as part of a planned strategy to place sustainability at the heart of the business.

The reasons for this are simple and more often than not come down issue of cost. Most local retailers in Scotland, I’m reasonably confident in saying, have a desire to reduce their store’s carbon footprint and build more sustainable businesses – but this doesn’t often translate into action because there are so many more mission-critical issues to deal with that take priority, and understandably so.

Shopper demand

But the times they are a-changin’ and the arguments for embracing sustainability more positively are growing by the day. A recent IGD report, for instance, named sustainability as one of the five most important trends ‘set to shape retail in 2019’.

“Sustainability concerns will change the way retailers do business,” says the report bluntly. Toby Pickard, IGD’s Head of Insight, Innovation and Futures, believes that this trend will be driven squarely by shopper demand: “2019’s biggest trend of all is likely to be the continuation of rapid and radical change in the food and grocery industry. Shoppers’ expectations have changed, and the retail and grocery sectors are working to meet those expectations in every area of business.”

The IGD reports that food retailing businesses of all size will increasingly take the lead on sustainability. “Issues such as food waste and plastic pollution are headline news, and this has translated to changing attitudes across the generations,” says Pickard. “Nearly three quarters (74%) of UK shoppers say that they have become more aware of the environmental impact of plastic packaging over the past year. Retailers are no longer thinking about just reducing waste, but want to make a positive, tangible contribution. The next wave of innovative and leading retailers and brands will move beyond reducing their impact.”

The risk here is that c-stores could be left behind in the battle to win the environmental hearts and minds of increasingly socially-conscious shoppers as the supermarkets and discounters use their deep pockets to rapidly implement sustainability improvements then communicate those improvements to shoppers more quickly and efficiently.

But one thing looks certain: the next generation of shoppers, including the infamous Generation Z, will place far more importance on sustainability and wider social and moral issues than their predecessors. Most vitally of all, they are more likely to make their buying decisions based on these issues and could choose one store or one retailer over another based on these beliefs.

Scottish Grocers’ Federation (SGF) Chief Executive Pete Cheema believes this is all but inevitable: “The new generation of shoppers coming through are more actively interested in a range of issues like sustainability and community integration than older generations perhaps were. The challenge for local retailers is to proactively embrace sustainability and then communicate the good work they are doing to their shoppers.

“We know that many local retailers in Scotland are already doing some fantastic work around challenges like food waste, recycling, plastics and energy use, which is fantastic, and SGF is working hard at both Holyrood and Westminster to drive the sustainability agenda. But this is really only the tip of the iceberg. There’s a lot more work to do and sustainability is an issue that is only going to grow in importance in the future.”

Deposit Return Scheme

One of the principal reasons that sustainability has hit the headlines in Scotland recently is the Deposit Return Scheme (DRS) that is set to revolutionise the way drinks containers are recycled. The Scottish Government recently published the findings of its three-month public consultation into the implementation of a DRS scheme and over 3,000 people responded.

An overwhelming majority of respondents want to see a very broad range of materials included, with 90% wishing to see PET, cans and glass as part of a DRS for Scotland. Furthermore, 88% want an ‘all-in’ scheme rather that one limited to on-the-go. More than half of all respondents suggested deposit levels of between 15p and 20p per container.

Environment Secretary Roseanna Cunningham said: “Work continues apace to finalise our proposals for deposit return and bring forward the necessary legislation to support its introduction.” She also said she would be happy to explore how the scheme could be aligned with similar schemes in England, Wales and Northern Ireland.

Reverse vending company Tomra Collection Solutions welcomed the results of the consultation. UK boss Truls Haug said: “Based on our global experience we believe a DRS will help see the return of over 90% of drinks containers for recycling within just two years of the scheme being introduced in Scotland.”

The consultation findings were published just a week after three SGF member stores launched reverse vending machine trials. From mid-February through to April this year, customers at Nisa Local in Bellshill, Premier Broadway in Oxgangs, Edinburgh and Keystore in Moredun, Edinburgh will receive 10p for every empty plastic bottle or can deposited into machines supplied by Envipco.

Dr John Lee, Head of Policy and Public Affairs at SGF, said: “These trials will give us invaluable learning and insight into deposit return, particularly how shop staff and customers respond to having a reverse vending machine sited in-store. This learning will ultimately help us develop and implement a system which is effective for retailers, consumers, and communities.”

Abdul Majid, owner of Nisa Local Bellshill, said: “We are delighted to be one of the stores involved in this ground-breaking trial. This will help local people to recycle, reduce litter and improve the local environment.”

Suppliers

It’s not all down to retailers however with most of the leading suppliers having already formulated detailed sustainability strategies.

Coca-Cola European Partners (CEEP), for instance, recently celebrated the first anniversary of the launch of its Sustainable Packaging Strategy. This includes moving all large PET bottles to 40% rPET (recycled PET) this year with the wider aim of transitioning its entire PET portfolio to 50% rPET.

The strategy’s ultimate and very ambitious goal is to “to recover all of our packaging so that more is recycled and none ends up as litter”.

Importantly, CCEP also helped retailers close the communications loop by undertaking its biggest ever recycling-focused multi-media advertising campaign, ‘Love Story’, which reached 27 million consumers. This is so vital because, as yet, it’s very rare to see local retailers leveraging the good work done by suppliers by communicating the progress made by suppliers direct to consumers.

Nick Brown, Head of Sustainability at CCEP, says: “As a business we want to keep challenging ourselves to ensure we are part of the solution on packaging. We believe we are at a crucial moment in time, with a once-in-a-generation opportunity to create real change for packaging recovery systems in GB.”

There’s undeniably a massive amount of change happening in this area but the one thing that retailers should bear in mind above all else is that doing good can be good for business. Many sustainability solutions can help reduce costs at a time when costs are rising all around us.

Secondly, it’s clear that shoppers’ demands are changing – and retailers need to change alongside. Research group GlobalData found in a recent survey that an overwhelming 71.4% of consumers said that they consider the environmental impacts of their choice of food and grocery retailers and products. In other words, if you can’t show them that you are operate a business with sustainability at its heart, they may shop elsewhere with a retailer who can.

Emily Salter, Retail Analyst at GlobalData, commented: “Since the BBC’s Blue Planet documentary series showed the devastating effects that the sheer volume of plastic waste has on marine life, food retailers have had to react and make changes.’’

And it goes without saying that community retailers should really be leading from the front here. After all, if you are going to improve the state of the planet the best place to start is on your own doorstep.