Ethical and Green Retailing - UK - September 2009

Table of Contents

• Issues in the Market
• Main themes
• Definition
• Retail Sales data
• Abbreviations
• Future Opportunities
• Giving shoppers more reasons to buy ' green'
• Taking green consumerism to the next stage
• Making information more meaningful
• Market in Brief
• Consumer resolve weakened by the impact of recession
• Consumers less inclined to pay green or ethical price premiums
• Not all retailers delivering improvements
• Major reductions in carbon emissions planned in the next ten years
• Increase in environmental legislation is forcing retailers to take action
• Retailers' green initiatives not improving levels of consumer trust
• Momentum building for greener living
• Consumer support for recycling and waste reduction remains widespread
• Internal Market Environment
• Key points
• Top priorities for retailers are energy efficiency and emissions reduction
• Measuring environmental impact
• But not all companies make this information available
• Will disclosure become mandatory?
• Who has the highest carbon intensity?
• Who is making the most progress on carbon intensity?
  • Figure 1: Percentage annual change in absolute and relative carbon emissions 2007/08-2008/09
• Waste reduction a key objective
• Who generates the most waste relative to sales?
  • Figure 2: Waste relative to sales, 2006/07-2008/09
• Helping to reduce post-consumer waste by design and specification
• HFCs -- supermarkets refrigeration under scrutiny
• Sustainable sourcing factors and issues
• Local sourcing factors and issues
• Ethical sourcing factors and issues
• Is Fairtrade fair?
• The market for green and ethical products has shown strong growth
• More recent trends convey mixed messages
• Broader Market Environment
• Key points
• Climate Change Act now law
• Carbon Reduction Commitment effective in April 2010
• Climate change legislation stimulating greener products
• Rising unemployment -- a catalyst for change?
• Use of financial instruments to stimulate greener buying behaviour
• Carbon labelling rising up the agenda
• Waste reduction driven by government
• Carrier bags -- 50% reduction target nearly hit
• Recession undermining UK recycling strategy
• Who' s Innovating?
• Key points
• Greener store initiatives
• Greener packaging
• Refillable and returnable packaging
• Compostables an alternative to recyclable
• Unambiguous labelling
• Greener services
• Waitrose wants bikers
• Offsetting (online) spending
• Greener products
• Top 12 UK Retail Groups' Ethical and Green Strategies
• Key points
• Tesco
• J Sainsbury
• Asda
• Morrisons
• Co-operative Group
• Marks & Spencer
• Alliance Boots
• John Lewis Partnership
• Home Retail Group
• DSG International
• Kingfisher
• Next
• The Importance of Ethical and Environmental Issues to Consumers
• Key points
• Retailers know that consumers really do have a conscience
  • Figure 3: Trends in lifestyle statements on social/political/ethical and environmental issues, 2005-09
• Ethical and green issues important to a majority of respondents
• More people rate these issues as important than 12 months ago
  • Figure 4: Importance attached to ethical and environmental issues when shopping, March 2007, June 2008 and July 2009
• Widespread basis of concern
• Minor bias to more affluent consumers
• As many Es as ABs rate these issues as very important
• Young affluent consumers need reminding of their responsibilities
• Children a catalyst for change
• Which Retailers Do Consumers Trust?
• Key points
• Retailers slowly building trust
• Only John Lewis/Waitrose built trust in both 2008 and 2009
• No gain from Plan A for Marks & Spencer
• Boots significantly underperforming
• Primark has not suffered from bad publicity
  • Figure 5: Consumer trust in retailers, March 2007, June 2008 and July 2009
• Co-op must trusted relative to use
  • Figure 6: Consumer trust in retailers compared to usage, June 2009
• What People Think About Green and Ethical Issues
• Key points
• Clothing shoppers seeking reassurance
• Delegated trust
• Widespread cynicism
• Increasing reasons to buy
• Risk of a backlash greater on ethical than environmental failings
• Organic foods under pressure in the recession
• Organic -- increasing reasons to buy
• Nearly one in five cannot afford to be green or ethical
  • Figure 7: Consumer attitudes towards ethical and environmental issues, July 2009
• Widespread demand for reassurance on ethical provenance
• Enlightened self-interest widely recognised
• Risk of boycotts greatest among more affluent
• ABs and families prominent in cutting back on organic foods
• Younger people ignoring the issues due to financial pressures
• Leading clothing retailers stand to gain from stronger ethical labelling
• Response to ethically-inspired boycotts strong among shoppers of leading retailers
• Impact of economic downturn on attitudes and behaviour
  • Figure 8: Statements agreed on ethical and environmental issues -- any adverse reaction to financial constraints (netted), July 2009
• Greater numbers of less affluent people affected
• Cost and convenience override green and ethical issues
• ABC1 pre-families and families directly affected
• Has People' s Buying and Behaviour Got Greener?
• Key points
• More consumers actively going green
• Disposable bags on the way out
• Need for consistency
• Car use under pressure -- but fuel price growth less of an issue
• No increase in interest in carbon labelling
  • Figure 9: Greener behaviour and buying, June 2008 and July 2009
• Green momentum building
  • Figure 10: Repertoire of effort to be more environmentally-friendly, July 2009
• Pre-family adults lagging in the conversion to low-energy bulbs
• Younger people and men less likely to be using reusable bags
• Switching off the standby mode has broad appeal
• Less affluent householders slowest to adopt energy-saving technology in the home
• Most affluent are cutting down on car use
• M&S, Co-op and Morrisons shoppers have highest take-up of reusable bags among grocers
• Carbon labelling hot spots
• Perceptions of Packaging and Recycling
• Key points
• Awareness and responsiveness to packaging issues high
• Sustained levels of active recycling
• Complacency about rubbish and recycling?
• Packaging issues not important enough to influence shopping behaviour
• Sustained interest in reusables
• Time to consider other packaging options
• Low levels of confusion about recyclable materials...
• ... but people want retailers to do more to reduce waste
• Recyclable packaging needs local support
  • Figure 11: Consumer attitudes towards packaging and recycling, July 2009
• Men and younger people lag behind on recycling
• Retailers held responsible for the amount and recyclability of packaging
• Widespread support for reusable bottles
• All shoppers demanding on-packaging specification
• Shoppers of all the leading grocers are supportive of reusables
• Appendix -- Internal Market Environment
  • Figure 12: Leading 12 retailers' turnover, 2006/07-2008/09
  • Figure 13: Leading 12 retailers' trading area, 2006/07-2008/09
  • Figure 14: Leading 12 retailers' CO2 emissions, 2006/07-2008/09
  • Figure 15: Leading 12 retailers' CO2 emissions relative to turnover, 2006/07-2008/09
  • Figure 16: Leading 12 retailers' CO2 emissions relative to space, 2006/07-2008/09
  • Figure 17: Leading 12 retailers' waste generated relative to turnover, 2006/07-2008/09
• Appendix -- The Importance of Ethical and Environmental Issues to Consumers
  • Figure 18: Agreement with lifestyle statements on social/political/ethical and environmental issues, by demographics, 2009
  • Figure 19: Agreement with lifestyle statements on environmental issues, by demographics, 2009
  • Figure 20: Agreement with lifestyle statements on environmental issues, by demographics, 2009
  • Figure 21: Importance of climate change, environment and ethical issues when shopping, by demographics, July 2009
  • Figure 22: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
  • Figure 23: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
  • Figure 24: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
  • Figure 25: Stores visited in the last 12 months, by importance of climate change, environment and ethical issues when shopping, July 2009
• Appendix -- What People Think About Green and Ethical Issues
  • Figure 26: Attitudes towards ethical and environmental issues, by demographics, July 2009
  • Figure 27: Attitudes towards ethical and environmental issues, by demographics, July 2009
  • Figure 28: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
  • Figure 29: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
  • Figure 30: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
  • Figure 31: Stores visited in last 12 months, by attitudes towards ethical and environmental issues, July 2009
  • Figure 32: Stores visited in the last 12 months, by attitudes towards ethical and environmental issues, July 2009
  • Figure 33: Agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints (netted), by demographics, July 2009
  • Figure 34: Stores visited in last 12 months, by agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints (netted), July 2009
  • Figure 35: Repertoire of agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints, July 2009
  • Figure 36: Repertoire of agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints, by demographics, July 2009
  • Figure 37: Attitudes towards ethical and environmental issues, by repertoire of agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints, by demographics, July 2009
  • Figure 38: Stores visited in last 12 months, by repertoire of agreement with statements on ethical and environmental issues -- any adverse reaction to financial constraints, by demographics, July 2009
• Appendix -- Has People' s Buying and Behaviour Got Greener?
  • Figure 39: Efforts to be more environmentally-friendly, by demographics, July 2009
  • Figure 40: Efforts to be more environmentally-friendly, by demographics, July 2009
  • Figure 41: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
  • Figure 42: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
  • Figure 43: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
  • Figure 44: Stores visited in last 12 months, by efforts to be more environmentally-friendly, July 2009
  • Figure 45: Repertoire of efforts to be more environmentally-friendly, by demographics, July 2009
  • Figure 46: Efforts to be more environmentally-friendly, by repertoire of efforts to be more environmentally friendly, July 2009
• Appendix -- Perceptions of Packaging and Recycling
  • Figure 47: Agreement with statements on packaging and recycling, by demographics, July 2009
  • Figure 48: Agreement with statements on packaging and recycling, by demographics, July 2009
  • Figure 49: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
  • Figure 50: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
  • Figure 51: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
  • Figure 52: Stores visited in last 12 months, by agreement with statements on packaging and recycling, July 2009
  • Figure 53: Stores visited in last 12 months, by agreement with statements on packaging and recycling, July 2009