Supermarkets battle to be the greenest of all

The Sunday Times
May 17, 2009

Smart initiatives win over customers and help to cut costs too, writes Jenny Davey
Nick Rodrigues

Wm Morrison is launching a new scheme to help slash the 12m tonnes of food waste created in Britain each year.
The initiative from the Bradford-based supermarket giant — called Great Taste, Less Waste — is designed to tackle the 6.7m tonnes of food that ends up in customers’ rubbish bins. The supermarket group plans to put up signs in its stores and post tips and advice on its website — such as putting apples in the fridge to make them last 14 days longer.
The project is the latest salvo from the big grocery chains in what has become the equivalent of an environmental arms race.
Supermarkets have competed for a place on The Sunday Times Green List for the first time this year. Tesco and Asda blazed
a trail for other high-street retailers and have been rewarded for their efforts with rankings among the 60 Best Green Companies in Britain.
The big four — Tesco, Sainsbury’s, Asda and Wm Morrison — are competing to be seen as the greenest, attempting to measure up to the environmental aspirations of some of their customers while seeking to inspire others to go green.
It is two years since Tesco pledged to put carbon labels on all its products, while Marks & Spencer launched Plan A — a 100-point programme to improve its environmental credentials. The two high-street giants started a race to become the greenest retailer in Britain.
Back then, the City largely dismissed the initiatives and questioned whether they were simply marketing gimmicks. But it has since become clear that, for supermarkets, going green is not about pure altruism or even good PR — it is also about the bottom line.
Retailers have discovered that the eco-agenda saves them money and brings in customers. That drive is likely to accelerate during the next five years as the British and American governments examine a range of green taxes that could hit companies that don’t embrace change..
It all means that, far from slipping down the agenda during the recession, green issues are more important than ever.
Alison Austin, environment manager at Sainsbury’s, said: “We haven’t dropped anything during the recession. Everything we do is either really good for the commercial bottom line or it is something that customers care about.”
This was borne out in the company’s latest results, published last week, which showed annual profits up 11% to £543m. Though the supermarket credited the increase in profits largely to its Switch and Save campaign, which promotes lower-priced Sainsbury’s-labelled products, supply-chain efficiency programmes helped to offset some 75% of the total cost inflation from wages, property and energy costs.

As the green agenda has become more competitive and focused, all the supermarkets have recognised that a big part of their carbon-dioxide emissions come from their supply chain — particularly in shipping goods to and from stores. Supply-chain emissions are thought to account for as much as 80% of a retailer’s carbon footprint.
Sainsbury’s now has a target to reduce its emissions per case of products by 15% by 2012. One of the initiatives is the introduction of an integrated transport management system, which calculates the most efficient timings and routes for deliveries, while minimising the number of empty vehicles on the road.
The group has also ruthlessly cut costs in all its stores. Its Reset programme has involved getting engineers to check every boiler, radiator, refrigerator and light in its stores to make sure they are working perfectly or at the optimum temperature. During the past two years the supermarket estimates the Reset initiative has cut its carbon-dioxide emissions by 53,000 tonnes a year.
The supermarkets are also responding to pressure from customers. Sainsbury’s responded to demand on green issues and stopped selling eggs from battery hens and introduced fish fingers in its own-label basics range which are cooked in certified sustainable palm oil. It found that by, boasting about the switch to palm oil on its packaging, sales of the fish fingers doubled.
David North, community and government director at Tesco, acknowledged the role customers are playing in pushing green initiatives. “The role of the consumer in terms of climate change is not properly understood. Every great change in society and the economy is achieved by the public. Therefore, as a consumer-facing business we can play a great role in achieving a green revolution.”
Tesco has continued to put green issues at the centre of its business strategy. It has an ambitious global target for every new store to have 50% less carbon-dioxide emissions than its existing shops. Like its rivals, it is focusing on ways to cut down on truck mileage in its supply chain, partly by increasing sales of local produce.
In-store, it has tried to make it easier for customers to be green by cutting the cost of low-energy lightbulbs.
North said: “When we reduced the price of energy-saving light bulbs it revealed a pent-up demand. Customers want to be green and are looking at businesses to set the example.
“We have to get back to being a low-carbon economy and it is in the best interests of Tesco to be green because we believe all successful businesses will be green.”
Julian Walker-Palin, head of corporate policy for sustainability and ethics at Asda, said that a desire to be green cuts across all geographies and customer income brackets. When Asda first tried to reduce carrier-bag usage by putting them under the checkout rather than on display, the initiative was taken up quickest at Asda stores with the lowest-income customers.
“People felt they could do their bit for the environment by not taking a carrier bag and it proved you do not have to be rich to be sustainable.”
Asda has pledged to send zero waste to landfill by 2010 and has created a special taskforce packed with outside experts who can advise the retailer on how to reduce packaging waste. Some experts believe that the green initiatives could even make the retailers some money.

Mike Barry, head of sustainable business at Marks & Spencer, said that during the past six months its Plan A green policy has become cost neutral and analysts believe that, over time, it could even make a profit for the company.
M&S announced the plan in January 2007 and pledged to invest £200m in the initiative — but as cost savings have borne fruit, they have already offset the green investments made by the company.
Additional reporting by Nick Rodrigues and Tricia Davis
Every little helps at Tesco
WELCOME to the greenest supermarket in Britain. The Tesco store in Cheetham Hill, Manchester, has a carbon footprint 70% smaller than any of the retailer’s other outlets.
Opened four months ago, it takes advantage of the most innovative developments in environmentally friendly architecture and engineering and provides the template for a new generation of low-carbon supermarkets.
It is the product of two years of testing environmentally friendly designs, materials and technologies in Tesco stores across Britain.
The 70% carbon savings at Cheetham Hill fall into three broad areas: energy efficiency (31% saving), use of natural refrigeration (20%) and use of renewable energy (20%).
Store lights dim and turn themselves off according to the availability of natural light, while everything used in the construction of the store has had its environmental impact assessed.
“We carved up the store into key areas, we looked at every single item and worked with our suppliers to see where we could make improvements,” said programme manager Jake Ronay.
The most notable features of the new store are the wooden beams that run throughout and the natural light.
“The warmth of the light and the timber is not what customers are used to,” said Ronay. “But wood is a good building material from a sustainable source and the natural light gives the store an 8% energy reduction.”
Another innovation is its combined cooling, heat and power plant, which meets 25% of the store’s electricity needs, all of its heat and 50% of its refrigeration. At its heart is a Scania engine powered by vegetable oil. Its carbon-dioxide emissions are 78% lower than those of a conventional power plant.
Deputy manager Jon Taylor said the store has had a huge impact. “The difference is visually obvious, so your attitude changes straight away,” he said. “The building makes it easy to care for the environment. It turns you into an eco fan.”