By Aileen Corrieri, Research Officer
“We fully support the extension of the sugar tax to other drink categories”. That was not a comment from an NGO, but from a representative of a UK retailer I chatted to after their Annual General Meeting. I had gone into their AGM feeling quite nervous, I didn’t know how the Board would react to my question asking them to commit to disincentivising unhealthy eating in their stores. I was surprised by how receptive they were and how eager they were to meet with ShareAction to discuss our Healthy Markets campaign on childhood obesity and sugar consumption. Were all retailers going to be this keen to talk about their role in creating healthier environments?
Flicking through their glossy annual reports while crafting my questions for each retailer’s AGM, it certainly seemed as if they were all committed to helping customers make healthier choices. But the more I researched, the more questions I had on their commitments and claims. Retailers report they are reducing sugar in their products but how are they performing against Public Health England’s sugar reduction targets? Are retailers planning to implement healthy eating plans in their convenience stores and not just in their supermarkets? Why do retailers say they ban sweets at checkouts, but surveys by the Obesity Health Alliance and the Sunday Express show this isn’t always the case?
These are the type of inconsistencies we highlighted to retailers at their AGMs. Asking AGM questions is an established and powerful ShareAction tool which can highlight important issues to both the Board and shareholders. And so armed with one share, we attended a total of six retailer AGMs this year (Ocado, Co-op, Tesco, Sainsbury’s, M&S and Morrisons) to let them to know their actions are appreciated, but that they can and must do more. It was great to see that our questions were well received and that all retailers acknowledged the importance of tackling childhood obesity. As a result of our successful AGM questions, we are now planning meetings with retailers to take the discussion further and make sure healthy eating remains a priority.
From a growth perspective, prioritising healthy eating makes business sense. With 85% of shoppers actively trying to eat healthier, supporting them by creating healthier shopping experiences will be key for retailers if they wish to maintain or increase their market share.
Our AGM questions at retailers were well received and they all acknowledged the importance of tackling childhood obesity.
Profits aside, retailers also have the power to make our food environment healthier. The UK grocery sector was valued at £190.3 billion in 2018 and with almost 70% of the market share held by the top four retailers, that power is concentrated in just a handful of companies.
Moreover, retailers are finding new ways to get a bigger slice of the pie and increase their reach to survive in a highly competitive and dynamic market. One way has been to enter the booming convenience sector by buying up competitors, such as Co-op buying Nisa, or by launching convenience store formats, like Aldi did this year with its new Local stores.
Another way has been to increase the amount of own label products on the shelves to compete with both retailers and branded food and drink manufacturers. As a result, retailers are outselling brands in many product categories, such as cakes, morning goods, puddings and ice creams, with sales from own branded snacks and soft drinks steadily growing too.
Retailers have the power to make our food environment healthier, and can have the edge on their competitors by doing so.
As the reach, power and product count of retailers increase, so does their opportunity and role in helping customers lead healthier lives. Decisions they make influence how we do our food shopping and how we eat, from the layout of shops, to the price, location, and (un)healthiness of the products available. By using their influence to create healthier stores retailers can capitalise on the growing consumer trend towards health and wellness, secure market share, and help tackle the rising obesity rates in the country.
In the past the conversation around healthy eating predominantly focused on food and drink manufacturers and their products, but it is now recognised that retailers hold equal responsibility. That’s why our Healthy Markets campaign will be benchmarking UK retailers on their performance in collaboration with the Access to Nutrition Initiative. Retailers will be benchmarked on how they are creating healthier food environments and implementing measures to tackle childhood obesity. The results will be published at the end of the year and will provide shareholders with a clear picture of leaders and laggards among food retailers in the UK.
With high demand for healthier products and everything to gain from moving to healthier business models, retailers should find this as easy as pie.
Thanks Aileen! To learn more about our campaign to create healthier food options, click here.