£140bn investor coalition led by ShareAction drives adoption of landmark health commitments for the grocery sector
(Wednesday 05th May, London) Tesco has committed today to increase its sales of healthier food and drink products across all of its group retail business, by setting out further actions to be applied to the Booker Group and its Central European operations. These build on the supermarket’s recent commitment to increase the share of healthy products from 58% to 65% of sales by 2025 in its UK and ROI Tesco stores.
Tesco’s commitments follow months of engagement between the company and a coalition of seven institutional investors led by ShareAction, who in February filed a shareholder proposal calling on the UK’s biggest supermarket to reduce its exposure to less healthy food and drink products.
The company’s new plans respond to this investor engagement, committing Tesco to action on health across its entire retail group, covering an additional £10bn in sales (20% of Tesco’s retail revenue), up from £42bn (80%) in March.
As such, the coalition of investors is withdrawing its resolution. A two-year process of engagement has been agreed between Tesco, ShareAction and investors in the Healthy Markets Coalition, as Tesco implements the new commitments.
Obesity costs the UK £54 billion each year in lost earnings and profit, and about 10% of the national health budget in treating related disease. Severely obese people have been three times more likely to be admitted to intensive care with Covid-19. Supermarkets play a pivotal role in population health through their influence in shaping what we eat. ShareAction’s Healthy Markets investor coalition will continue its work engaging with supermarkets and food manufacturers on the risks and opportunities they face from increasing regulation and shifting consumer preferences.
Louisa Hodge, Engagement Manager at ShareAction, said:
“Investors are recognizing the importance of health. They see the risks and opportunities supermarkets face, given their outsized role in shaping our diets. By filing a shareholder resolution, our investor coalition sent a strong message to Tesco and to other supermarkets that shifting sales toward healthier options is important. Tesco's new ambition to support healthier diets through its UK and Central European stores, as well as through the Booker Group, is very welcome. We look forward to continuing to engage with Tesco as it implements these commitments and fully develops its plans beyond UK retail.”
Sarah Bradbury, Group Quality Director at Tesco, said:
“We share the same goal as ShareAction to make it easier for our customers to eat more healthily, and we’re pleased to now broaden our public commitments to Booker and our Central Europe business. These new commitments will ensure that every customer – wherever and however they shop with us – will have even greater access to affordable, healthy and sustainable food. Our focus now is on delivering the plans that we’ve set out, and we will continue to engage with ShareAction and other stakeholders as we work to make Tesco the easiest place to shop for healthy food.”
Stephen Power, British Province Treasurer, Jesuits in Britain, said:
“The Jesuits in Britain, as one of the original co-filers, are happy to hear that Tesco has agreed to show greater transparency in its efforts to encourage healthier eating - particularly in the context of a worsening obesity crisis that creates higher risks for people during the pandemic. It's heartening to hear that Tesco has now committed to increase the proportion of healthy food sold across their business and that they have agreed to on-going dialogue with ShareAction on this issue.”
Harry Evans, Associate Fund Manager at Epworth Investment Management/Central Finance Board of the Methodist Church, said:
“At the Central Finance Board of the Methodist Church, we are pleased by Tesco’s 2025 targets to encourage healthier diets through its Tesco-branded UK and Republic of Ireland store sales, and now also across its European and Booker Group operations. We look forward to continued constructive collaboration, as Tesco works towards its targets.”
Notes to editors
For all enquiries and interview requests, please contact:
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Tesco’s health commitments
- Increase the share of its UK and ROI sales derived from healthier food and drink products from 58% to 65% by 2025 (announced in March);
- In its Central European business, commit to increase sales of healthier food and drink products on a similar trajectory to UK and ROI, including, formulating specific targets by the end of 2022 (new). This is to include a specific sub-target to increase sales of plant-based meat alternatives by 300% by 2025 in these countries (new);
- Encourage Booker consumers to choose healthier options by increasing ranges of healthier products available, and nutritional information provided via labelling and online (new);
- Engage with ShareAction and members of its Healthy Markets investor coalition as the Company develops and implements the plans set out above over the next two years.
For more information on this story please see the following earlier releases:
Or read our Q&A for shareholders: Q&A on Tesco’s Resolution on Healthy Diets
The institutional co-filers are:
- Robeco Institutional Asset Management B.V.
- JO Hambro Capital Management’s UK Dynamic Fund.
- Epworth Investment Management, owned by the Central Finance Board of the Methodist Church.
- Jesuits in Britain.
- Guy's and St Thomas' Foundation
- The Marmot Charitable Trust.
- The 1970 Trust.
- 101 individual retail investors also co-filed the resolution.