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Earth Day 2019: Who's trading fairly?

Thursday 18 April 2019 Data Insight & AnalyticsRetail Consultancy

Louise O'Donovan's picture
By Louise O'Donovan

You can’t easily escape the headlines on the negative impact that consumerism has on the environment. From plastic usage, to CO2 emissions, to wastage; it seems our addiction to consumption and the state of the environment are inextricably linked.

In the run up to Earth Day, Monday 22nd April 2019, we explore how retailers are responding to consumers’ increased awareness of the environmental impact of their consumption habits, their changing expectations relating to this and thus, their demand for retailers to join them in their quest for sustainability.

 

The increasing need to promote sustainability

In the UK alone, we use 5 million tonnes of plastic each year, almost half of which is packaging (House of Commons Library, 2019). There is also a huge amount of wastage in the UK of food, clothing and products. WRAP, the Waste and Resources Action Programme, estimates food wastage to be 10 million tonnes, of which 70% was purchased with the intention of being consumed. If we don’t start making changes, and soon, demand will continue to rise and the negative environmental impacts will continue to snowball.

93% of global consumers expect more of the brands they use to support social and environmental issues.

Retail Industry Leaders Association (RILA)

The challenge - What can be done?

This promising shift in consumer expectations creates a new challenge for retailers and landlords, highlighting the need to become more responsible and aware of environmental issues. The focus needs to switch to incorporating sustainable operations into their business models, from day-to-day office operations, to manufacturing and the make-up of the products themselves.

Tesco and Lidl are leading the way in the grocery industry, with Tesco trialling plastic packaging recycling in 10 of their stores and aiming to make all their product packaging recyclable by 2025. Lidl have focussed on food wastage, and are one of the first supermarkets to publish food waste data. They are committing to the sustainable development goal target of a 30% reduction in food waste by 2030. To help achieve this goal they are packaging ‘not quite perfect’ fruit and vegetables into boxes.


Fig 1. Lidl's Wonky fruit & vegetable box, sold at £1.50 for 5kg

 

Maison Simons, a Quebec based retailer, have opened a new store that will be a net zero energy consumer. Costing tens of millions to build, the store will use solar energy and geothermal boreholes. The long term benefits to the retailer’s energy bills, carbon footprint and corporate social responsibility should be outweighed by this huge investment cost.

Some more of our favourite efforts to be more responsible include:

  • Knight Frank becoming a plastic free business, teaming up with Surfers Against Sewage.
  • H&M aim to use only recycled or other sustainably sourced materials by 2030.
  • John Lewis pledges to have net zero carbon emissions by 2050, reducing transport emissions by switching their 3500 strong transport fleet to be entirely electric and investing in renewable energy.
  • PLT and Arket have joined the likes of Oliver Bonas and Missguided to partner with clothes recycling app Regain that enables users to donate unwanted clothes in return for discount codes to be used with the app’s retail partners.

 

What does this mean for retailers?

It is the younger generations, in particular Gen Z, that are the most aware of the environmental impact of their consumption. CACI research shows that Gen Z will be key consumers by 2035, making up an estimated 21% of retail spend, with Millennials making up 28%. Since these environmentally aware consumers will be the key shoppers when these issues have gained more traction, retailers and landlords should begin to focus on what they can do to stay ahead of the game.

To discover how CACI can give you a greater insight into the future challenges for retail, get in touch with one of our experts.

In the run up to Earth Day, Monday 22nd April 2019, we explore how retailers are responding to consumers’ increased awareness of the environmental impact of their consumption habits, their changing expectations relating to this and thus, their demand for retailers to join them in their quest for sustainability.

Earth Day 2019: Who's trading fairly?