Food retailing
Social, ethical, and environmental factors affect the foods that consumer buy. Intolerance and allergies can affect diets and availing a balnced diet can help navigate these problems. The social responsibilities that food retailers meet include socio-economic changes such as foreign travel, eating patterns and immigration, and lifestyle such as work/life balance, fewer children, greater spending power, and people living loner. Many food retailers are increasingly employing both legal and illegal immigrants in the countries in which they operate. In their part, food retailers are making it their responsibility to ensure that they employ legal immigrants and compensate according to the prevailing labor market rates. Food retailers in the UK have undertaken considerable investment among its members to help customers make healthier and balanced choices (British Retail Consortium). The food retailers have devised initiatives that cover developments in areas such as labeling, reformulation, and providing nutritional information in catering establishments, as well as offering insights into converting consumer attitudes into healthy messages and healthy foods.
Environmental factors include things that help reduce the impact of food production and distribution on the environment and ultimately affect decision of a consumer to buy a product. As such, food retailers are encouraging producing foods locally to reduce carbon footprint when transporting food. This can help reduce the negative impact of food production on the environment. Food retailers are keen to showing consumers that they are going green, fair-trading, recycling-friendly, waste-conscious, and energy-conservative. While some environmentalists have condemned them for ‘green washing’ food retailers have spent millions of pounds on improving their systems, merchandise, and stores to make themselves greener and ethical. Since 2008, all major food retailers have put in place an environmental or ethical strategy aimed at dealing with their operational systems and costs, providing information to customers, and trying to improve their suppliers. These plans are not general approaches but involve detailed approaches to procedures, operations, and strict timetables. Among the best known in the UK is probably Marks & Spencer, which introduced a £200m "eco-plan" aimed at making it carbon neutral within five years (Chouinard, 2011). Marks & Spencer said this was its contribution toward the fight against global warming. The company has cut its waste by more than 35% and it recycles all its waste, which goes to anaerobic digesters.
The Co-op Group, which pioneered Fairtrade, is probably the prime mover of all food retail environmentalists. The firm won the Business Commitment to the Environment award after reducing its carbon emission by 86 percent. However, Sainsbury’s, which has engaged in ethical business practice for longer period compared to many, has criticized rivals for making unrealistic environmental promises as a means of gaining competitive advantage. More and more companies are hiring people with environmental responsibilities in their job descriptions. Some organizations have formed environmental committee, or green team to help develop and implement environmental initiatives throughout the organization. Food retailers use unique strategies to incorporate sustainability into their companies. These strategies include recruiting external corporate advisors, integrating environmental indicators into the operations of the business, and identifying the return on investment for all environmental programs.
Food retailers are increasing engaging in corporate social responsibility with focus on local communities, regeneration, meeting local/cultural and spiritual needs such as specialty foods for religious festivals, specific ways of handling and preparing food, specialist vegetables and spices, and improving working conditions for people working in the food retail industry. Food retailers engage in corporate social responsibility for because of many reasons, as do companies in other sectors. A study conducted by Piancentini et al. (2000) on CSR activities found that the main motive for engaging in CSR activities is to maximize space, profitability, and customer relationship. Some of the companies recognized the benefits of being seen by the customer as socially responsible, but none of them was driven primarily by philanthropic motives. In an attempt to be seen as socially responsible, food retailers are striving to meet local ethnic or cultural and spiritual needs of consumers by organizing specialty foods for religious events including Lohri, Ramadan, and the Jewish New Year. Such special events help food retailers find a way of connecting with their consumers in a special way by appealing to special needs of each group of customers.
Firms such as Tesco meet their CSR by following strict evaluation of its business partners against ethical trading practices. The company has codes that suppliers must follow and violation of these code results into immediate termination of contract. The company promotes freedom of association and the right to collective bargaining and providing safe and hygienic working conditions. Tesco suppliers must also not engage in child labor, discrimination and inhumane treatment. Many food retailers in the UK have started aligning their strategic objectives with CSR practices. Some retailers are offering co-branded credit card with some banks only to its women customers at some stores. Such initiatives help both the retailers and customers where women are empowered to exercise their consumer choice and the retailer get the opportunity to penetrate into untapped consumer segments.
With the advent of globalization, food retailers have started adopting corporate good governance norms. This has led to more stringent and frequent reporting and monitoring norms. This has worked to their advantage by ensuring transparency and increase satisfaction of consumers and shareholders. Some food retailers have taken into consideration the interest of all stakeholders while making business decisions. To this end, various codes of conducts have been formulated internationally and some of the codes include Fair Labor Association, Social Accountability 8000 (SA 8000), and Worldwide Responsible Apparel Production (WRAP).
Importance of food retailers meeting their social, ethical environmental and corporate social responsibilities
Corporate social responsibility forces retailers not only to comply with the short-term interest of their shareholders, but also determine the best means of meeting the long-term needs of all their stakeholders without compromising the ability of future generation to meet their needs. Being able to meet social, ethical environmental and corporate social responsibilities is typically an order-winning or qualifier in most markets as consumers are becoming increasingly aware of social, ethical, and environmental issues and are making choices based on ethical grounds. Meeting social, ethical environmental and corporate social responsibilities help retailers to reduce risks. Building a genuine culture of ‘doing things right’ can improve the corporate image and remove unwanted attention from courts, regulators, media, and governments. It also helps in reducing costs through using less energy, reducing packaging and material, and minimizing waste. Adopting ethical practices can also make it easier for a retailer to recruit and retain good employees.
Meeting social, ethical, environmental and social responsibilities by food retailers has positive impacts to both the retailers and consumers. Enacting practices that reduce environmental impacts in the countries where retailers source materials and products help in improving the relationship between the customers and the retailers. This also helps the retailers to gain competitive advantage because consumers view them as sustainable. Engaging in practices such as transporting product via sea can help reduce carbon footprint. Some retailers are using energy efficient lighting system to greatly cut down on the consumption of energy.
Meeting social needs of consumers help food retailers make foods that meet the meets of consumers. Communities are multicultural, which implies that they are made up of different religions, races, and often with their own traditional cuisine. Taking such diversity issues into consideration enable food retailers to efficiently meet the needs of consumers based on their lifestyle and reduce conflict with consumers. Taking such diversity issues into consideration also enables food retailers to introduce best practices that meets the need of each group of customers. In addition, reducing waste, water, and energy usage makes good business sense and encourage consumers to associate with companies that they feel are socially, environmentally, and ethically responsible. In addition to doing the right things for the right decisions, food retailers want positive image for their commitment to ethical retailing. Many consumers have noted the efforts by companies like M&S, Co-op, and Waitrose in ensuring ethical retailing. For example, none of these stores sells eggs produced by caged birds. However, consumers are not experts and they can base perceptions on their attitudes to the retailer. An example is Tesco that feels deeply frustrated because most of its work on ethics and green retailing pass mostly unnoticed. The company has invested enormously in determining carbon footprint with the aim of reducing carbon emission.
Bibliography:
British Retail Consortium. Retrieved from http://www.brc.org.uk/brc_policy_content.asp?iCat=46&iSubCat=659&spolicy=Food&sSubPolicy=Nutrition%2FSalt
Chouinard, Y., Ellison, J. and Ridgeway, R. (2011) ‘The sustainable economy’, Harvard
Business Review, 89(10): 52–62.
