By Jessica Attard, Head of Food and Health, ShareAction

ShareAction, together with over 100 institutional and individual investors is filing a shareholder resolution on health at the UK’s largest food retailer.

We’re asking Tesco to sell more healthier food.

View the resolution >>

 

An obesity epidemic

The UK enters 2021 as one of the most obese nations on the planet.

We top the charts in Western Europe and aren’t far behind Mexico, Australia and the UAE. It is a chart that no one wants to be at the top of, but it is little wonder we are.

Everywhere we go, we’re flooded with opportunities to consume products high in calories and low in nutritional value. From our TV screens to billboards and bus stops; and that’s before you’ve even entered a supermarket or other food outlet.

 

The role of supermarkets

When I trained to be a dietitian, I was taught that it’s always cheaper to have a healthy diet, fruit and vegetables are often relatively cheap and readily available in supermarkets after all.

This belief no longer holds true.

There’s now a weight of evidence that for busy families, for whom convenience is key, healthy food often comes at a price premium that is out of reach.

Over many years, supermarkets have anchored their business models around driving sales, and a key tactic in this has been to put the spotlight on cheap to buy, calorie-dense and highly processed products.

But there is another way.

Both small scale supermarket trials and larger scale interventions like the Sugary Drinks Industry Levy have proven that healthier baskets can be achieved without a reduction in business revenues. Supermarkets aren’t the only place people get unhealthy food, and the finger regularly gets pointed at fast food outlets.

These of course have a role to play, but with 76 per cent of food spend from low income families being spent in the supermarket, this is a great place to start to improve the nation’s diets.

 

ShareAction’s health resoltuion : Moving beyond publicity campaigns

Tesco has played a role on health during and before the Covid-19 pandemic. In 2019-20 it ran a series of independently evaluated in-store trials, some of which significantly shifted consumer purchasing toward healthier alternatives.

More recently, it has teamed-up with the charity BiteBack 2030 to offer tips and advice for feeding kids well over lock-down. Whilst Tesco is making some progress on health, activity to date has been piecemeal and consisted of small-scale trials or tokenistic publicity campaigns.

We’re now calling on the supermarket to go beyond rhetoric and publish an ambitious health target and underpinning strategy.

When ATNI assessed supermarket disclosure on a range of health topics in 2019, Tesco, like other retailers performed poorly. It reported on just 30 per cent of indicators.

While Tesco claims to measure the nutritional profile of its sales, it hasn’t set targets for growing the proportion of healthy sales, unlike its competitors M&S and Sainsbury’s who have already or are planning to.

Moreover, the Food Foundation found that ‘encouraging healthy diets’ was Tesco’s weakest area of performance across 10 environmental and social topics.

 

A call to action

Our resolution asks Tesco to set and report on a target for growing the proportion of its sales from healthier products.

We’re not specifying what the target needs to be, or by how much they need to improve on their current position. We’re simply asking that they set a target, and work toward achieving it.

Without setting a clear target for increasing the proportion of healthy sales, Tesco are leaving themselves open to questions about how committed they really are to helping their customers stay healthy.

 

The financial risk of inaction is too great

Obesity, and related health issues, were already rising-up the agenda for the government even before the pandemic shone a spotlight on them.

The Covid-19 death rate for people who are obese is 1.5 times that of the general population and the government has responded by announcing new regulation clamping down on supermarkets pushing the sale of unhealthy products.

This is not the first set of regulation in this area – sugar taxes are now more common than carbon taxes – and it won’t be the last.

Retailers who don’t keep-up or get ahead of the curve risk over-exposure to punitive measures and missing-out on the potential to capitalise on growing consumer demand in this area.

The financial risk of inaction is simply too great to do nothing.

 

The potential to lead

As the UK’s largest food retailer, with over a quarter (27%) of the grocery market, Tesco’s actions are of systemic importance in tackling poor diets and reducing obesity levels. This prime market position has not yet translated into leadership on this critical issue.

Embracing the resolution demands would enable Tesco to take a leadership role commensurate with its market position – and would bring its health policies up to the standard of its more ambitious steps on climate.

As we start to think about a world beyond the pandemic, Tesco has an opportunity to address this gap in its strategy and to use this moment to become the market leader in supporting its customers to have healthy diets.

By voting for the resolution, investors can make this point to the Board.

We hope that the Board will recognise this opportunity too and support this resolution to the benefit of customers and shareholders.

View the resolution >>