The slogan ‘Just Eat’, which was once ‘Don’t Cook, Just Eat’ (YouTube, 2012), appeals to our inner Neanderthal; some of us may cook in postmodern kitchens, but we all consume like prehistoric cavemen. Pre-industrial humans, like all species in nature, lived Malthus-style perpetually on the edge of famine, breeding up their numbers when times were good and suffering the loss of the most vulnerable when food became scarce again. Our bodies were well-adapted for such an environment; every time food was plentiful, we gorged on it, because it would be famine tomorrow. Our biology ensures we are very good at absorbing and storing calories, and we only use up those calories at the very minimum necessary to maintain life once the plentiful times are over. This is precisely why it is so easy to gain weight and so hard to lose it. Prehistoric cavemen would have feasted on whatever large animal they managed to kill; eating quickly not just because their bodies said, “Store calories now!” but because if they didn’t consume it, other organisms would, from vultures and rodents to bacteria and fungi. If by extreme good fortune they managed to kill a second large animal tomorrow, that too must be quickly eaten. Fridges were scarce out on the savannah 20,000 years ago. The equivalent now of that large animal kill are the bright shining aisles of our supermarkets, and if feast tomorrow follows feast today, we still overconsume because your body can never be sure that famine won’t return. In fact, when ‘famine’ does briefly return in the shape of a whole day’s closure of the supermarkets for a public holiday, witness the frantic food buying as if prepping for some disaster, the terrifying prospect of no easy access to cheap plentiful food for a whole 36 hours.
For some, it was more of a disaster when the supermarkets opened in the first place and then gained such market dominance that in many developed countries, just five large retail corporations often now sell over three-quarters of total food consumed. The obvious front-line casualties of supermarket expansion are the smaller retail players, many of who whom have either closed down or been absorbed, taken over by giants such as Tesco. The secondary effects on other small retailers caused by supermarket expansion are discussed in Chapter 3. These effects may include the closure of shops, such as ironmongers, that, whilst not directly competing with the supermarkets, nevertheless depend on High Street footfall generated by smaller everyday grocery shops now stripped from traditional retail areas. This denudation produces ‘clone’ or ‘zombie’ High Streets; retail areas that are either strings of identical banks, chemists, takeaways, jewellers, etc., or are populated by only the fringe retailers that peddle trades the supermarkets are not interested in, such as charity shops, gambling shops, vaping shops, personal grooming salons, cheap discount ‘99p stores’ or ‘Dollar stores’ and the like.
One measure of market dominance is the Concentration Ratio (CR), which is simply the sum of the percentage market shares of the largest companies, usually the biggest three, four or five of them. Australia is an exceptional case where just two supermarkets, Woolworths and Coles, control 80% of the grocery market between them. Larger countries, by area, tend to have less concentrated retail markets because distance protects from competition. However, even in the USA, the number of retailers accounting for 20% of sales fell from 33 in 1980 to just 7 in 2005. In 2005, Walmart alone took 9% of the US retail market and the share of the top three retailers, or CR3 (Concentration Ratio 3), was 13%. Walmart is so large that in 2006, with total sales of US$ 312.5 billion, it accounted for over 10% of total US imports from China (Zhen, 2007: 37). In European countries, the retail CR3 for 2005 was over 50%, rising to over 80% in the smaller-population Nordic countries of Norway and Sweden (Zhen, 2007: 11).
Table 1.1 gives the grocery market CR for selected countries and how this CR has evolved over time. A consistent measure of CR between countries over time is not possible because different countries use different CR numbers; as noted earlier, for Australia, a CR2 ratio is appropriate because just two supermarkets command the market there, whereas in many European countries, there are four or five major players. The other confounding factor as regards comparison over time is the rapid expansion of the discount chains Lidl and Aldi in many countries since 2000. Because these chains were small or non-existent in many national markets, but have now expanded to capture 10% or more of the market, the CR4 or CR5 in many regions has fallen; however, this can scarcely be taken as a retreat of the dominance of the supermarket phenomenon in general.
The interpretation of CR(n) figures is complex, especially when new smaller entrants are rapidly gaining ground, but the overall trend of these figures is that in all these countries, the supermarkets have a dominant and generally growing market position.
|
Country/Year |
Ca. 2000 |
Ca. 2005 |
Ca. 2010 |
Ca. 2015 |
|---|---|---|---|---|
|
Australia |
71% (2)2011 |
80% (2)2015 |
||
|
Austria |
82% (3)2009 |
87% (3)2015 |
||
|
Belgium |
72% (5)2000 |
71% (5)2011 |
71% (5)2015 |
|
|
Brazil |
62% (5)2000 |
64% (5)2005 |
||
|
Canada |
75% (5)2011 |
|||
|
Czech Republic |
63% (5)2010 |
70% (5)2015 |
||
|
Denmark |
84% (5)2000 |
80% (5)2009 |
||
|
Finland |
88% (3)2011 |
80% (2)2015 |
||
|
France |
83% (5)2000 |
65% (5)2009 |
80% (6)2015 |
|
|
Germany |
76% (5)2000 |
85% (4)2011 |
85% (4)2015 |
|
|
Hungary |
55% (5)2010 |
57% (5)2015 |
||
|
Ireland |
81% (5)2006 |
89% (5)2018 |
||
|
Italy |
31% (5)2000 |
40% (5)2009 |
51% (5)2015 |
|
|
Japan |
65% (5)2014 |
|||
|
Netherlands |
95% (5)2000 |
65% (5)2010 |
55% (2)2015 |
|
|
Norway |
84% (5)2000 |
81% (3)2011 |
96% (3)2016 |
|
|
Poland |
34% (5)2010 |
47% (5)2015 |
||
|
Slovakia |
64% (5)2010 |
70% (5)2015 |
||
|
Spain |
51% (5)2000 |
70% (5)2009 |
50% (5)2018 |
|
|
Sweden |
95% (5)2000 |
95% (4)2006 |
80% (4)2015 |
|
|
Switzerland |
76% (3)2011 |
|||
|
United Kingdom |
71% (5)2000 |
74% (4)2004 |
76% (4)2011 |
85% (5)2015 |
|
USA |
28% (4)1999 |
35% (4)2006 |
43% (4)2010 |
55% (4)2014 |
Source: Adapted from Bell & Cuthbertson 2004; Nicholson & Young, 2012; Ezeala-Harrison & Baffoe-Bonnie, 2016
Number of firms in CR is in brackets. Non-European Union (EU) countries (2018) in bold.
Notes: (1) Some CRs have fallen due to market capture by Aldi and Lidl and (2) Methodology not necessarily consistent between years.
The growth of the supermarket as the primary means by which most people in developed countries, also an increasing number in less-affluent nations, purchase their food, has been well-documented already, but from a CSR perspective it is worth reviewing the multiple dimensions of the one principle that has been central to this expansion: economies of scale. The basic premise of ‘economies of scale’ is simply that as an enterprise doubles in size, many of its costs rise by considerably less than that, if at all. A payroll system that can handle 100 employees can probably just as easily handle 200; a shop-floor manager can oversee 20 staff with not much more difficulty than she can manage 10. Some costs may even fall as the company doubles in size. Advertising becomes less necessary because the corporation and its products are already well-known, and the physical premises become its own advertisement as it creates a bigger physical footprint on the landscape. Perhaps the most significant cost to fall as size rises is raw materials costs, because in general a bigger customer can negotiate (force, demand) a lower price from suppliers. To an extent, supplier’s costs will fall as the order size increases because they too enjoy economies of scale—a more insidious discount arises when the order size is so large a monopsony situation arises. The supplier may become a ‘commercial colony’ of the corporation, dependent on it for all its trade, but lacking the support that a true subsidiary of the corporation would enjoy.
Worldwide, the top-30 supermarket chains control 33% of all global food sales (GRAIN, 2014).The top-ten chains alone have annual global sales in excess of US$ 1.3 trillion, sold through over 106,000 outlets, as Table 1.2 illustrates.
However, one interprets the figures, the message appears to be that a very few supermarket companies with massive economies of scale, less than one per thousand farmers, control most of the developed-world food sales and therefore possess huge commercial power. They are adept at using this power, as the rest of this book shows, and it is then essential that such power is harnessed for the good of wider society (a concept further explicated in Chapter 3) rather than left in the hands of a few huge private corporations.
The essence of gaining economies of scale is that unit prices of production fall, and therefore a virtuous circle (virtuous from the company’s point of view, at least, but perhaps not so good for society and the environment) can be set up whereby lower prices leads to further capture of market share, leads to further corporate growth, leads to more economies of scale and still lower prices. Economists recognize that there may be a point when economies of scale become diseconomies; administration becomes more complex as the company expands into different territories with varied currencies, customs, market demands, employee and customer theft rises, management becomes bloated and complacent, the corporation becomes so big it loses the capability to react swiftly to changing demand and is outmanoeuvred by smaller nimbler leaner competitors. To an extent, this has already happened with the largest supermarket chains such as Tesco losing ground since around 2005 to the German deep discounters Aldi and Lidl. British customers have also changed shopping habits, due to exogenous societal changes, such as more people living singly and in smaller homes, and a shift in attitudes away from planning ahead for the week towards a lifestyle of shorter time horizons and last-minute meal decisions. This has driven supermarket shoppers away from big out-of-town sheds towards both online ordering and smaller local shops; in response, the major supermarkets have heavily penetrated the convenience store market with chains such as Tesco Express and Sainsbury’s Local. Information communications technology (ICT) has drastically pushed back the frontiers of economies of scale, perhaps to the point where for many industries, the inflexion point, where diseconomies of scale kick in, effectively no longer exists because such a magnitude is beyond the size of planet Earth itself. Supermarkets have been outstandingly successful at giving consumers lower food prices, at least at the till. Of course, as we shall see, the till price is not the only price we pay for cheap food. ICT has enabled the supermarkets to gain economies of scale at the smaller end of the stores’ size range, whilst operating multiple small local neighbourhood convenience branches.
|
Supermarket chain |
Sales (US$ billion, 2013) |
Number of outlets (2017) |
|---|---|---|
|
Walmart |
446.24 |
11,695 |
|
Carrefour |
149.01 |
12,300 |
|
Tesco |
104.51 |
6,800 |
|
Metro Group |
102.27 |
750* |
|
Seven&I Holdings |
95.89 |
46,000** |
|
Kroger |
93.23 |
2,800 |
|
Lidl |
86.28 |
10,000 |
|
Costco |
85.38 |
740* |
|
Auchan |
79.36 |
3,050 |
|
Groupe Casino |
74.61 |
12,000 |
|
(Total) |
1,316.78 |
106,135 |
Source: Adapted from GRAIN, 2014
* Metro and Costco are both cash and carry warehouse type outlets with fewer and very large outlets.
** Seven & I controls the Seven-Eleven convenience chain, with many smaller convenience outlets.
Food purchasing generally presents the consumer with a classic trilemma: a situation where any two desirable characteristics out of three must be chosen, thereby excluding the third, but one wants all three. In the case of food, the three characteristics are convenience (speed and ease of preparation), price and healthfulness. Taste or palatability is also important, of course; this is linked to healthfulness as discussed below. Convenient cheap food is usually not healthy; cheap healthy food usually takes effort to prepare, and healthy food that is convenient is usually not cheap. It might seem odd that consumers usually prioritize low price; if we are choosing an accountant or an architect to design a home extension, we would usually go for the best not the lowest price. Yet food is us; we are what we eat, so for our own bodies, we pick the cheapest (Shaw, 2014: 13). This is our inner Neanderthal kicking in again; we have short time horizons. See a large animal and kill it now with the minimum effort possible, no point in pondering whether the tribe already has an excess of meat that in the absence of refrigeration will soon rot, or if it even an edible animal or how dangerous it is, by the time Neanderthal man has worked all that out, the prey has long gone, or eaten its human hunter.
The equivalent attitude today is asking someone whether they would choose a prize now of £1,000 or wait a year and pick up £1,200; 90% of the people you ask will take the £1,000 now, despite the fact that they have effectively turned down an investment opportunity paying 20% interest over one year. If you point this financial short-sightedness out, people reply “I might not be here in a year; you might not be here”, or, more tellingly, “Well, I’d rather just enjoy the money now”. Interestingly, this attitude of ‘satisfaction now over gain later’ seems to vary on several parameters. The already wealthy are more likely to bank and wait, whereas the less affluent will take the £1,000 now (even if they could in fact defer for a year and being less wealthy should value the chance of a strong financial reward more). As the percentage return rises, from, e.g., 10% to 20%, the willingness to defer rises at a time when interest rates are miserably low and savers do well to find an account paying even 2% per annum. Also, as the original sum rises, say to £10,000, the willingness to defer rises, because the future rewards of patience are so much higher: £2,000 instead of £200. Translate this into healthy eating now to prolong life and health later or indulgence now, and one could infer that as we eat several times a day, thousands of times a year, meals and snacks, we see each meal as a small ‘sum of money’, more like the £1,000 than the £10,000. Yes, we know that a sugary sweet isn’t good for us and may bring health problems in later life, but, just one more dessert now, can it make so much difference? Also, perhaps those of us who are poorer, more financially stressed, are also more hedonistic now. As George Orwell wrote in The Road to Wigan Pier, “A millionaire may enjoy breakfasting off orange juice and Ryvita biscuits; an unemployed man doesn’t”. Foregoing a fatty, salty indulgence meal for a bowl of salad seems to bring a very small potential return on health in return for that missed moment of pleasure.
With food, we, therefore, tend towards short-term hedonism, and once again, it is down to the caveman heritage. We love the deadly trio of salt, fat and sugar. This made perfect sense, biologically, in the days when most of the available food was plant-based. Salt is vital for health, but may be rare in plants. Sugar is a significant short-term energy source, and fat is how our bodies store energy for long-term growth and healing. Meat and fish are excellent sources of all three of these nutrients, but these three become poisons when consumed in excess. As Paracelsus said in the 16th century “Alle Dinge sind Gift, und nichts ist ohne Gift, allein die Dosis macht dass ein Ding kein Gift ist”, which translates to, “All things are poison, and nothing is without poison, the dosage alone makes it a poison or not”. In other words, a basic principle of toxicology, nothing is poisonous in tiny quantities, and, significantly for food, every nutritional substance is poisonous in excess quantities, even vitamins, water and oxygen.
Our problem with hedonistic taste and healthfulness is that in our modern food environment of abundant salt, fat and sugar, what is tasty for us is frequently inversely related to how healthy it is for us. Chocolate, burgers and crisps sit at one end of this spectrum, but we should be eating broccoli, sprouts and unsalted nuts. Crucially, this health versus hedonistic taste opposition has been partially set up by the food industry itself, as dominated by the supermarkets. We saw earlier why the hedonistic taste but low health end is so appealing, but why is healthy food so unappealing for many? Like the history of supermarket growth, this is a well-researched area; the basic problem is how our food tastes are formed from birth or even before. Humans have a useful biological adaptation; we are genetically endowed with just two fundamental tastes, a linking for sweetness and an aversion to sourness, because nothing sweet in nature is poisonous but bitter things generally are. However, we detect pungent flavour molecules from what our mothers eat, even whilst we are still in the womb, and as babies, we continue to taste such molecules in our mothers’ milk (Shaw, 2014: 51). This means we grow up liking whatever our family, tribe or nation generally eat, which is just as well for a growing hungry infant. The problem today is that sugar has become very cheap, for historical and commercial reasons (Shaw, 2014: 18), and today’s children are likely to be growing up in a sugar-rich, vegetable-poor food environment, especially if they are from poorer families, partially because sugary, fatty, salty processed foods are so cheap. Cheap sugar has laid the foundation for our obese society, and the supermarkets are enthusiastically building on that foundation.
Obesity has become one of the most significant health concerns of the early 21st century in the developed world and is rising fast in the developing countries too. In fact, the ‘thrifty gene’ theory of obesity suggests that as cheap, fatty, sugary foods have, over the course of just a few years, become widely available in countries where hunger and under-nutrition were until recently the norm, we may see an extremely rapid rise in obesity amongst the younger populations of these countries. This is because the ‘thrifty gene’ theory (Shaw, 2014: 31–2) suggests that unborn infants in the womb can detect if the mother is underfed or not, for example, by her low blood sugar, and adjust their metabolisms to cope. These infants grow into people who are very efficient at hoarding whatever calories they consume, which is not a good biological strategy in an obesogenic sugar-rich world. In countries such as Brazil, China, Egypt, India and Mexico, where a cultural appetite for all (food) things ‘Western’, that is, from the USA, thrives, the emerging supermarket corporations in these developing countries may come to bear a heavy social responsibility for any rising obesity epidemic.
Obesity causes a wide range of diseases, which cascade on from the initial health issue of diabetes. Obesity-generated diabetes starts because the body becomes desensitized to insulin, especially the insulin ‘spikes’ produced by periodic bingeing on sugar-rich foods. The resultant raised sugar levels in the blood cause inflammation, especially of the smaller capillaries, which then damages the eyes and peripheries of the limbs, which leads on to blindness and amputations. In other medical cascade effects, raised bodyweight produces arthritis and sleep apnoea, which in turn creates daytime fatigue and raises the risk of accidents with vehicles or machinery. Obesity may also predispose people to certain types of cancer. From a societal point of view, the main issue with the diseases mentioned earlier is that they cripple, not kill straightaway; they are chronic conditions that create years of costs, medical and social care, which, again, the developing countries, as they enter the obesity epidemic, are in no position to bear.
The costs of obesity on society that developing nations like China or India may face is predicted by the costs already facing countries such as the UK or USA. In the UK, the cost of obesity to the National Health Service (NHS) alone is estimated at £6.1 billion and expected to rise to £9.7 billion by 2050, even as the NHS faces other cost pressures from an ageing population and more expensive drugs and other treatments (UK Government, 2017). This is just the cost borne by the NHS; there are other costs to society, including private medical treatment, care costs (both formal and informal) and lost productivity. The UK government estimates total obesity costs now as UK£ 27 billion, rising to £49.9 billion by 2050. In the US, the total costs of obesity are estimated at US$ 150 to 210 billion per year. There is an interesting financial congruence here with the private cost of eating healthily: the so-called health premium. Although with a little ingenuity and some time to spare, it may be possible to eat healthily and cheaply by going to street markets and learning some cooking skills, for many working people, this is not a practical or desirable option. Healthy produce at supermarkets is generally costlier than unhealthy high sugar, fat and salt foods, by as much as 50% over the same number of calories in cheaper foods. In the US, the cost of healthy eating over an unhealthy diet has been estimated at US$ 1.50 per day per person (Imamura et al, 2015). With a US population of 325 million people, the private cost to consumers of healthy eating equates to US$ 1.50 × 365 days × 325 million, or US$ 178 billion. In other words, there is both a financial incentive for the US government to promote healthy eating and a financial need to help many hard-pressed US families to fulfil this objective of eating a better diet. Without some cash transfer, which would ultimately be self-financing, the costs of obesity to the US will grow. The problem is, this is a long-term issue, and governments now do not like to spend on initiatives that will only bear fruit some years or decades down the line.
Regarding future health costs, childhood obesity is a major concern, because obese children are very likely to become obese adults. It is also far more likely for a healthy-weight child to become an obese adult than vice versa; our biologically ingrained calorie-hoarding habits, in a calorie-rich environment, make the trip from normal weight to obesity very much a one-way affair. Tables 1.3 and 1.4 suggest a rising obesity epidemic within the UK that will create large societal costs for decades to come (UK Government, 2017).
Meanwhile, worldwide, there are (2017) 124 million obese children, 7% of them (up from 13 million, less than 1%, in 1975), as the Western diet is copied around the world.
Losing weight is far harder than gaining it, so the focus needs to be on obesity prevention rather than cure. Because obesogenic foods are so attractive (in price as well as taste), we cannot simply aim for a shift in consumption towards fruit and vegetables. Rather, we need to involve multiple agencies from, inter alia, education, government, NGOs and the private sector (Parish, 1996: 21–2). We need to tackle the so-called obesogenic environment, a multi-faceted concept that includes neighbourhoods where car use is more attractive than walking, cycling and public transport. Workplaces could encourage exercise, such as substituting stairs for the lift, walking rather than email. Schools could incorporate more home cooking lessons and even food production on site. Although a focus on food consumption alone is not enough to reduce obesity, the supermarkets must bear a significant responsibility for the condition of our waistlines for three reasons: (a) they sell the bulk of the food we buy, (b) they have a societal role that goes far beyond simply selling food and (c) they owe a moral debt to wider society, which has in numerous ways facilitated their growth and success.
|
1975 |
2016 |
|
|---|---|---|
|
Overweight and obese |
2,660,000 |
4,530,000 |
|
Obese |
360,000 |
1,130,000 |
|
Age group |
Normal or underweight |
Overweight |
Obese |
|---|---|---|---|
|
4 and 5 year olds |
78% |
13% |
9%* |
|
10 and 11 year olds |
66% |
14% |
20%* |
|
Adults |
37% |
36% |
27%** |
* Twenty-eight percent of all children aged 2–15 were overweight or obese.
** Twenty-four percent were ‘obese’ and 3% ‘morbidly obese’.
Physical size was an early dimension of economies of scale exploited by the supermarkets, as they left their original High Street locales for large sheds on the edge of town. The average size of a food supermarket in the UK rose from 260 metres2 in 1974 to 700 metres2 in 1980 and 1,300 metres2 in 1994 (sales area of shop; importantly, this excludes any storage area behind the shop). Between 1974 and 1983, the average size of a new store being opened rose from 1,100 metres2 to 1,900 metres2. Over the same period, the average size of a store being closed, probably because it was too small, rose from 150 metres2 to 450 metres2. In other words, the average size of a store being closed in 1980 was larger than the average size of a store operating in 1974 (Shaw, 2003: 35). Meanwhile, the average size of a UK Tesco store grew from 500 metres2 in 1972 to 2,600 metres2 in 1992, and the average size of a Tesco under construction in 1992 was 4,000 metres2 (Wrigley et al, 2002: 77).
From the 1990s, the focus of new store openings in the UK shifted from larger out-of-town stores back to the urban areas, as Tesco and Sainsbury opened their ‘Express’ and ‘Local’ shops on High Streets and in suburban locations. At the same time, Aldi and Lidl were also opening small supermarkets in suburban areas. However, size was not the only dimension of economies of scale exploited by the supermarkets; longer opening hours and product diversification have also occurred. The exploitation of these alternative dimensions of scale has been highly dependent on exogenous technologies and/or political developments. For example, the supermarkets have benefitted from legal developments such as the progressive abolition of Resale Price Maintenance (RPM) in the UK, starting from 16 June 1964, as lobbied for by Tesco. RPM was originally a measure originally intended to protect smaller retailers from ‘unfair’ price undercutting.
The supermarkets have extended their opening hours later into the evening and into Sundays, eroding a key competitive advantage of small independent ‘open all hours’ shops. Sunday opening was largely outlawed in the UK by the 1950 Shops Act, a measure designed to protect the welfare (leisure time) of shop workers. Only shops selling ‘perishable goods’, a class which included fresh produce and periodical journals, could open on a Sunday, along with pharmacies. However, this led to legal absurdities, such as pornography magazines (periodicals), being available for sale on a Sunday, whereas Bibles (books) were not. The UK has become a markedly less Christian country since 1950, and Sunday openings by the large food retailers began just before Christmas 1991 in the UK, in defiance of the law but with the tacit support of a large section of British consumers. The UK Home Office sought guidance from the attorney general, Sir Patrick Mayhew, who advised against prosecution. Instead, the Conservative Government of John Major enacted the 1994 Sunday Trading Act, after pressure from the Sainsbury supermarket, allowing openings by the major chains for up to six hours on a Sunday. Sunday supermarket trading has been now legalized in countries once staunchly opposed to any violation of the Christian ‘day of rest’, including Catholic Italy in its tourist areas.
Meanwhile, the major supermarkets have greatly diversified their product range out of their original purely food offerings. Tesco, started selling petrol in 1974, as more car-borne customers started arriving at their new out-of-town sites. A large Tesco Extra store will now stock electrical goods, beauty products, entertainment goods, cookware, clothes, pharmaceuticals, white goods and financial products. This has greatly widened the range of High Street shops that are vulnerable to supermarket competition and has left some former core retail areas as ‘zombie centres’, hosting only the fringe retailing that Tesco didn’t want to get into, as these lines offer scant economies of scale. This has turned former thriving retail streets into twilight retail zones, where no everyday items such as meat, vegetables, medicines, bread or household goods can be found; instead, there is a parade of sandwich bars, betting shops, charity shops, hairdressers, coffee bars, takeaways and vape lounges. Interspersed with these may be the ‘shadow’ supermarkets for those too poor to buy a full value household item, such as Bright House, also smaller white goods and electronics retailers like Euronics. But all those with cars have driven out to their nearest large retail park where the supermarkets are sited. Economic factors hastening this trend include the problems of car congestion and parking, and the squeeze on local council finances as globalization has eroded the high-earning tax base of central government, leading local administrations to restrict and charge more for High Street parking, whilst out-of-town retail centres offer free parking. The retail abandonment of the High Street is typified by the US city of Atlanta, Georgia, where city centre retail sales as percentage of total city sales fell from 39.1% in 1954 to 15.1% in 1977; as a percentage of total metropolitan area sales, city centre sales fell from 28.9% to just 4.0% over this period; the decline being down to the growth of out-of-town retail areas dominated by large-box retailers (Davies, 2004: 90).
From a CSR perspective, this product diversification has taken the supermarkets into whole new areas of upstream supply chain ethics, such as the employment conditions of clothing factories in south Asia; this is discussed further in Chapter 5. The supermarkets have also diversified into new international markets. China and India have been targeted by all the major supermarket corporations because they comprise a large market with a growing middle class with surplus income to spend, and both countries have been liberalizing their economies, opening up to foreign investment. Eastern Europe post-1990 and South America have also been targeted by the major supermarket chains, with the big retailers doing best in regions not too culturally dissimilar from their home territory. Hence Walmart from the USA has expanded heavily into South America, but done less well in Europe, with the exception, of course, of Anglophone Britain, where it took over Asda.1 Meanwhile, the UK’s Tesco has focussed more on Ireland and Eastern Europe, and France’s Carrefour has entered large swathes of Europe, North Africa, the Middle East and South America.
Again, there are several CSR angles to be considered here, from respect for non-Western cultural norms and values to the obesity issue mentioned earlier, to the ethics of selling obesogenic foods to large populations both culturally and biologically unprepared for these. Access by the supermarkets to countries such as China, India and Thailand has been facilitated by a global liberal free trade ethos promoted heavily by the US since 1980, with entry into Eastern Europe largely due to the continued economic and political integration of the EU. Meanwhile, infrastructure developments from the big container ports of Felixstowe to key international links, such as the Channel Tunnel, have facilitated the globalization of the food trade, which has brought about considerable environmental implications for the supermarket food trade. Supermarket CSR must now consider issues as diverse as carbon emissions from shipping, damage to the rainforest, agricultural worker wages and conditions across the world, as well as accurate consumer information as to the origins of food.
Supermarkets may argue that they simply ‘sell what people want’, but their size and market dominance makes them more akin to gatekeepers, even dictators, of what people ‘want’. The concentration of market share amongst a near oligopoly (for the consumer) or effective oligopsony (for the farmer) of supermarkets has been noted earlier. The power of the UK supermarkets is illustrated by Nicholson and Young (2012: 5), whose report illustrates the ‘hourglass’ structure of the UK food chain. Here, 7,000 suppliers must funnel their produce through just four supermarket chains that in 2012 controlled 76% of the UK grocery retail market of 25 million households. A more detailed breakdown, for an earlier year, stated that the UK’s food chain consisted of 3,827 fishing-related enterprises (11,000 jobs; 2.87 per enterprise) and 311,000 farm holdings (541,000 jobs; 1.74 per holding), with the farms being supplied by 1,646 agricultural suppliers (26,000 jobs; 15.80 per supplier). Agricultural wholesalers accounted for further 3,136 enterprises (22,000 jobs; 7.02 per enterprise) and food and drink manufacturing and processing comprised almost 17,700 enterprises (429,000 jobs; 24.24 per enterprise). All this output reached the final consumers, people, though a catering sector of 111,620 enterprises (1,394,000 jobs; 12.49 jobs per enterprise) and a retail sector of 61,100 enterprises, or 102,000 stores (1,184,000 jobs; 19.38 jobs per enterprise). Catering accounted for consumer expenditure of £71 billion and retailing £77 billion. Note the very small mean size of these enterprises, with average employees in the low double figures or even single figures (Defra, 2006: 10). Yet in 2004, the Big Four UK supermarkets (Asda with 165,000 employees, Morrison with 132,000 employees, Sainsbury’s with 182,000 employees and Tesco with 476,000 employees) between them controlled some 74% of the retail groceries market. At the loosest interpretation of the Department for Environment, Food and Rural Affairs (Defra) figures (ignoring any sales in catering of the Big Four supermarkets), just four giant retail corporations sold almost 40% of the output of over half a million enterprises employing over 3.5 million people.
The same supermarket nexus exists in all developed countries; in the US, Walmart had 61,000 suppliers in 2010 and served about one-sixth of US households; large consumer goods manufacturers and processors like Dial, Del Monte, Clorox and Revlon sell 25% to 30% of their goods through Walmart (Chandler & Werther, 2014: 56). In all these countries, thousands of suppliers must reach millions of customers through a few supermarket giants whose numbers can be counted on the fingers of one hand. At the global level, a ‘typical supply chain’ is given by Macfadyen et al (2015) as comprising, in downstream order, “13,000 farmers, 1,300 processors, 300 distributors, 5 supermarket chains, 880 retail outlets, and 3.3.million consumers”. Worldwide, there are an estimated 570 million farms, of which 4% are in high-income countries and 47% are in upper-middle-income countries. The ‘upper-middle’ countries include states such as Argentina, Brazil, South Africa, Romania, Russia and Turkey; all these are developing or already have a largely supermarketized food retail economy. Naturally, almost all the high-income countries are supermarketized, excepting some of the smaller island states where local retailers may survive, protected by monopolies of distance. Therefore, one can conservatively estimate that some 200 million farms worldwide depend largely on the supermarkets for access to the consumer (Lowder et al, 2014).
Therefore, supermarkets owe a significant debt to wider society for their success, which has seen companies such as Tesco and Carrefour regularly featured in the list of the world’s largest companies. Table 1.5 briefly summarizes the various dimensions of supermarket growth and the wider societal factors which have enabled this expansion. Supermarkets, therefore, also owe a duty, as ‘gatekeepers’ not just of consumer demand but also of socio-economic conditions, from animal welfare and the environment to farm labourer wages and consumer health, to act responsibly to repay the benefits they have reaped from societal development and change. The fact that supermarket corporations both depend on such a wide range of societal technology and infrastructure, and have the capability to greatly and adversely affect our health and our environment through the products they sell, means they must bear some CSR towards the society they operate in.
|
Dimension of scale of Supermarket operations |
Supermarket dependence on technology |
Socio-political changes (enabling factors) |
|---|---|---|
|
Increasing physical size (and migration from High Street to out of town) |
Lorries, container ships |
Creation of enterprise zones (leading to large out-of-town retail parks). Increasing popularity of car ownership. Congestion, parking charges, cash-poor councils |
|
Product diversification (including financial services) |
Motor car, shipping |
New roads, financial deregulation |
|
Longer opening hours |
Motor car (mobile customers, e.g. late evening) |
Sunday trading legalized (e.g. UK, Italy) |
|
International expansion |
ICT |
Globalization, lower trade barriers |
|
Format diversification, local stores, online sales |
ICT, refrigerated delivery vans |
Decline in pubs, etc., making local premises available |
The oligopsonic supermarket supply chain nexus can magnify and propagate food scandals, such as contamination issues, in a way never possible in the 1950s era of small retailers sourcing locally and selling in very limited geographical areas. A good example of this amplification is the 2010 dioxin scandal. This scandal originated with Ukrainian dioxin-tainted maize finding its way into organic chicken feed from the Netherlands, which was fed to hens in Germany, contaminating organic eggs there and resulting in a significant decline in organic egg sales in Germany ((Hall, 2016: 143). In Germany, Aldi, Rewe and Lidl were forced to throw away millions of eggs, as dioxin fears reached as far as Belgium and the UK, where contamination of cakes was feared. Then in 2017, history repeated itself when eggs from Dutch farms were feared to be contaminated with the insecticide Fipronil, which is banned from being administered to animals destined for human consumption (Boffey, 2017). Again, affecting predominantly the major chains Aldi, Rewe and Lidl, this incident ultimately spread to Belgium, France, Germany, the Netherlands, Sweden, Switzerland and the UK—seven countries with a combined population exceeding 260 million people. Ultimately, the systemic cause of these scandals was the relentless supermarket quest for cheap food, resulting in unreliable feed suppliers cutting corners and inadequate resources being given to monitoring the integrity of the food supply chain. In Britain, there was the 2013 horsemeat scandal, when Aldi, Asda, the Co-op, Iceland, Lidl, Sainsbury and Tesco all had to discard tonnes of meat because horsemeat of unknown origin had entered the food chain. Only the UK’s upmarket chains Waitrose and Marks and Spencer (M&S) were untouched by the affair.
We often forget that the till price is not the only cost we pay for our food. When buying cheap meat, for example, we ‘pay’ five times, once at the till and then through tax in the form of subsidies to farming operations. Thirdly, our taxes also go to maintain the infrastructures heavily used by the food chain, such as the shipping, airlines, ports and main roads their delivery systems depend upon; vehicle owners pay road tax, but this does not cover all the damage transport does—for example, noise and pollution from road, air and sea transport. Major transport hubs such as Heathrow or Felixstowe may charge for their use but these facilities also impose major environmental costs such as erosion, pollution and congestion. Fourthly, there is an environmental cost, and fifthly, we pay through deteriorating health for cheap unhealthy food. One quantified estimate of these extra four costs, amounting to the same again as the till price for food, is provided by the Sustainable Food Trust (Fitzpatrick & Young, 2017: 4). They estimate (tax-funded) farm support costs as 2.5p per £1 food till price, regulation and research costs (also taxpayer funded) as 2.7p, and the costs of imported food on society as 7.8p. Additionally, there are environmental costs of ‘natural capital degradation’ at 25.7p, and biodiversity loss at 10.6p, per £1 till price. Diet-related ill health is costed at 37.3p per £1 the consumer spends on food. There is no costing for infrastructure use such as road usage or Internet bandwidth taken. Some of these costs are borne by society as a whole or by the taxpayer, such as NHS care for obesity-related illnesses; some are borne by the consumer themselves, such as the taxes they pay or in private health costs.
A general principle that wealth accumulated by corporations should be utilized for the benefit of society was expressed by the 19th century steel baron and philanthropist, Andrew Carnegie, who said, “He who dies rich dies thus disgraced”. The duties of companies towards a wider set of stakeholders were further developed in 1953 with the publication of Bowen’s ‘Social Responsibility of Businessmen’, recognizing that corporations have duties beyond simply making profits for their shareholders. In 1991, B. Carroll proposed a Maslow-style pyramid of CSR, with the base as ‘economic responsibilities’ and higher layers successively as ‘legal responsibilities’, ‘ethical responsibilities’ and at the top ‘philanthropic responsibilities’ (Carroll, 1991). In 1954, Maslow developed a hierarchy of human needs, with physiological needs (food, water, covering) at the bottom, then security (shelter, property), then companionship (friends, family, partner), then esteem (confidence, achievement, respect) and, finally, at the apex, self-actualization. Here Maslow puts morality, creativity, problem-solving and ‘reaching one’s full potential’.
As with Maslow, viable corporations must first fulfil the lower layers, but then aim for compliance with the higher levels too. The apex level of Maslow is not dissimilar to the qualities a fully socially responsible corporation should display, solving the problems its activities create in the external environment and society, and reaching its full potential as, not just a profit-making machine for the shareholders, but as making a full contribution to the welfare of the communities in which it operates and upon whose existence it depends for survival. However, as regards the ‘duties’ of which Bowen wrote in 1953, the key questions of, firstly, ‘duty to whom?’ and secondly ‘what duties, what is a duty?’, still remain open to debate. Legislation on product safety, for example, varies across national jurisdictions, yet people everywhere have the same biology, so how far should a company go in warning customers of low-level, but individually catastrophic, health risks, such as a product that may cause cancer in one in a million users, in countries where such warnings are not legally required? What if a product may, in the opinion of some but not all scientists, cause harm to the environment not now but in a century’s time? What if, like the supermarkets, some of the products you are selling may cause an obesity crisis in 10, 20, 30 years’ time, but you are by no means the only possible contributor to that impending but distant crisis, and in any case, you didn’t make these products, you just sell them? And the public really want them?
In 2010, the International Organization for Standardisation (ISO) published the ISO 26000 guidelines on CSR, stating that CSR is the responsibility of an organization for the impact of its decisions and activities on society and the environment, through transparent and ethical behaviour that (1) contributes to sustainable development including the health and welfare of society, (2) is in compliance with applicable law and consistent with international norms of behaviour and (3) is integrated throughout the organization and practised in all its relationships. This definition, however, seems to reward corporations just for ‘complying with the law’; in contrast, we seldom reward private citizens for such compliance, rather we punish them if they do not comply. However, one should distinguish between hard law and soft law, both in the case of individuals and corporations. Hard law is what one can get penalized by the judicial system for contravening, for walking out of a shop without paying for the goods in one’s bag, maybe just because you don’t like the demeanour of the staff. However, soft law is more like the social mores of society; there is no legal penalty for contravention, although social ostracism may result for non-compliers, perhaps a custom to be nice-mannered to the shop staff even if you dislike something about the shop itself. Individuals of working age also are generally expected to try and support themselves whenever possible, rather than relying on handouts and charity—a ‘commercial duty’ to create wealth for society rather than simply consuming it.
One possible classification of the obligations of corporations might be, similarly, commercial obligations, hard law and soft law. Commercially, companies must make a return for their investors. They also have an obligation to obey the laws of the jurisdiction in which they operate; this ‘hard law’ is obligatory and non-negotiable (although supermarkets can lobby hard to change this law, as in the case of legalization of Sunday trading for example). Then there is ‘soft law’—a moral obligation to act conscionably, for example, to respect neighbours’ environment in terms of noise and visual impact, or not push unhealthy foods towards minors, or to minimize the use of materials that harm the environment. The obligations of hard and soft law, and commercialism, often blur together. For example, it is illegal (hard law) to discriminate against staff or job applicants on religious grounds, but making job adjustments so that Jews can fast on Yom Kippur, or to enable Muslims to fast for the month of Ramadan, is more of a soft law moral issue. However, in areas with a significant Jewish or Muslim population, it makes commercial sense, both from a recruitment and sales viewpoint, to make such allowances in the company work schedule. Equally, reducing carbon emissions by, for example, more efficient heating or vehicle use fulfils a soft law commitment to combat global warming; it also makes commercial sense to economize on fuel consumption. Then one might ask, as with rewarding a company for obeying the (hard) law, should a company get CSR credit for doing something that it would want to do commercially, reducing its energy costs, albeit helping to preserve the environment at the same time?
Unlike an individual who breaks hard law and can be imprisoned for serious breaches, and made to perform community service for minor infringements, the sanctions that a company can face for breaking hard and soft law are not dissimilar to those for breaking commercial imperatives. Short of criminal action against the directors, the main legal penalty a company can face is a fine, or restriction of trading; in other words, financial curbs on its profits. Similarly, a company that fails to protect the environment may face a customer boycott, a financial penalty again. Companies are seldom ordered to close down for even serious legal infractions, the equivalent perhaps to the death penalty, because that would harm the employees now made redundant. This lack of a range of more serious sanctions on corporately irresponsible companies can be a problem for those who would like to see companies be more accountable to wider society; as we shall see later, perhaps the best target to aim at in order to achieve better CSR is not the company, but rather government, NGOs and the consuming public.
The obligation of companies, to society and the environment as well as to shareholders, has been described by Elkington as the triple bottom line; the ‘three P’s’ of People, Planet and Profit (Elkington, 1997). Elkington’s ‘People’ covers the fair and just treatment of all persons affected by the operations of a corporation. Not just Christians but companies too need to obey Jesus’s command to “treat people as you would want to be treated”. Meanwhile, ‘Planet’ covers any corporate activities that degrade, diminish pollute or reduce the carrying capacity of any part of the Earth’s environment for its inhabitants (human and non-human), either now or in the future. As regards corporations in the food business, however, we may need a Fourth Bottom Line, ‘Provisions’. Food, as noted earlier, is a peculiar good in that people may desire unhealthy food even though over the long run it is bad for them, and the provision of adequate food for all, whilst a vital and laudable aim, may also be damaging to the environment if achieved in the wrong way. Enhancing food supply now without regard to the future environment is a trap many earlier civilizations have fallen into and perished in war and famine as a result, as far back as the ancient Mesopotamians of 6,000 years ago (Seymour & Girardet, 1986: 26–7). In the scientific 21st century today, we should be able to manage things better. In the food supply chain, often what seems good and vital, even in the short run, may be disastrous in the long-term.
The concept of a Fourth Bottom Line has been proposed by Cambridge Leadership Development as well as by the New Zealand government (Cambridge Leadership Development, 2013). This fourth line as currently conceived generally has a non-financial human element, such as spirituality, happiness, ethics or human fulfilment or purpose. ‘Why are we doing this’. It attempts to capture the element of well-being or cultural integrity that can be eroded by inappropriate or intrusive development, such as an oil pipeline through indigenous lands, or the touristification of Uluru (Ayers Rock) Australia, or Venice, even though that development may bring jobs and money. The Wellington government has defined the Fourth Bottom Line as ‘culture’, to ensure the inclusion of Maori culture in the people-, profit-, planet-oriented development of New Zealand. Alternatively, the concept has been utilized to differentiate between private and public returns, as in the case of an airport development that benefits airline companies but may also bring economic returns to the local community, but also disbenefits in terms of noise, congestion and detriment to the environment. The Fourth P has also been defined as ‘perspective’ (Kenney, 2009), introducing a time element to the concept of sustainable development.
Food is an intensely cultural good; food is ‘noisy’ (Smith & Jehlicka, 2007: 397) in that it speaks about the ‘socio-natural relations of production’, the cultures of consumption and social relationships under which it was consumed. Food is us, “you are what you eat”; as we have seen earlier; therefore, food carries significant long-term implications for our health and well-being, as well as costs for society. Therefore, it is suggested that in the case of supermarket CSR, the Fourth P to go alongside People Planet and Profit should be Provisions. In fact, the general goal of a healthy, sustainable, inclusive and accessible diet for all is somewhat absent from much supermarket CSR, despite all the colourful superficial ‘noise’ found on their websites about the environment, health and exercise, community and much else. Many supermarket CSR websites appear to comprise much ‘sound and fury’ but relatively little hard content. The following section of this chapter now critically analyses existing supermarket CSR publicity to see whether it is really ‘fit for purpose’ or is more of a publicity exercise, written for the benefit of its authors and owners rather for than general society.
Social concerns about corporate activities have by no means stayed constant over time. In the early 19th century, a British MP was concerned about the fragmentation of the countryside due to the proliferation of canals (Sutcliffe, 1816) and a few decades on many landowners protested about the smoke, noise and visual intrusion of the new steam engines, railways and viaducts crossing hitherto unspoilt valleys. Nowadays the canals, the steam railways and Victorian construction feats such as the Ribblehead Viaduct are loved and preserved as nostalgic remnants of a bygone age of elegance and engineering, a place tourists flock to see. Whether the 20th-century equivalents, the Westway or Spaghetti Junction motorway flyovers, across which many people’s food has travelled a few days before they bought it ever achieve such valued heritage status is yet to be seen. Like the Ribblehead Viaduct, they do at least possess graceful curves. However, CSR concerns do not always take 200 years to change. In the 1980s, as the migration of supermarkets to out-of-town greenfield sites next to the new ring road was in full swing, the Cam-paign to Protect Rural England (CPRE) was concerned about the loss of green space. The 1980s huge sheds have not been demolished and indeed have, as the CPRE and others feared, promoted further residential and commercial development to the point that many of the open ring roads that attracted the supermarkets, with their promise of easy access for deliveries and shoppers, are now becoming congested again. Yet now we accept such sheds as part of the urban periphery landscape; we also love the lower prices and choice they offer, although the advent of the Internet since 2000 as a commercial channel is now taking business from these sheds just as they took business from the old High Street shops.
Supermarkets have moved on, and as noted earlier, the emphasis from the 1990s shifted to local branches of the main chains. In 2002, Tesco bought the T&S Stores chain, which owned the One Stop and the Day and Nite chains. Subsequently, Tesco converted many of the One Stop fascia stores to its Tesco Express fascia. In 2004, several such stores in Hampshire, a generally affluent rural county of southern England, were so converted (Wrigley, 2007). From the point of view of the rural communities these shops served, in locations such as Four Marks, New Alresford and Whitchurch, the Tesco makeover greatly improved the offering of fresh produce and many local households took advantage of this by reducing the number of trips they made to more distant larger supermarkets in urban centres like Winchester and Basingstoke. Local people also perceived some deleterious aspects of the new store regime, principally an increase in large lorry deliveries (in rural lanes, where, for example, a church suffered obstructions to funeral traffic), also the threatened loss of some cherished architectural features of the old shops, such as an old ‘Hovis’ sign, and, finally, the loss of the old Post Office, which One Stop had hosted. Tesco wanted to maximize the retail return on its shop space; however, many local people were of pensionable age and unfamiliar with the Internet as a means of accessing government services.
The problems with Tesco’s larger lorries, and the threatened Hovis sign over the Tesco Express in Whitchurch, Hampshire, are illustrated in Figure 1.1.
The three CSR issues here were resolved in different ways. The Post Office was retained by Tesco and is still (2018) recorded as existing there, although a similarly converted One Stop store in Alresford Hampshire did see the Post Office move to another store (which subsequently closed and the settlement was without this facility, until the Co-op supermarket offered it a home). The lorry issue has not gone away, and Google Street View pictures of the site in 2009 show an identically parked Tesco lorry. However, we have perhaps become inured to such congestion problems as the general volume of traffic has grown. The Hovis sign was retained and is present on Google Street View 2009 and 2011 shots—but has vanished in the 2016 view. Over the decade since 2005 the population of Whitchurch will have changed considerably and the awareness of this locally historic sign will have faded. Likewise, the Post Office has lost much of its significance with the rise of email and online government sites, in a generation more accustomed to online services, computers and the Internet. This small case study illustrates that as society changes we perhaps come to accept the once unacceptable, like ubiquitous CCTV, Trump as US president and stringently enforced parking charges, what was once objected to become a part of the fabric of everyday life. Perhaps ominously for those who would keep a watchful eye on the less-corporately responsible activities of supermarkets, this suggests that an organization only has to persist with some policy long enough and it becomes normalized; the fight against it becomes too onerous; the fighters fade away. If large companies are to be made truly accountable for any harmful actions against society of the environment, we may need an alternative watchdog, perhaps government or NGOs, operating through sustained media campaigns to keep public awareness alive.
CSR publicity is a relatively new feature of corporate activities, with the number of companies across the globe publishing CSR reports up from virtually none in 1992 to 267 in 1996 and to 2,235 in 2006. (Jones et al, 2007). In 2010, some 4,000 companies across the world disclosed information on their environmental, social and governance performance, and this rate of increase did not slow in response to the global financial crisis that began in 2007, the so-called Credit Crunch (Mullerat, 2013: 17–18). Although these numbers document a significant increase, it has to be kept in mind that reporting companies still constitute only a small share of global business, with its roughly 82,000 multinational enterprises and over 23 million SMEs.
By 2016, it had become virtually obligatory for even small and medium-sized enterprises to have a CSR element in their web page. However, the voluntary and unregulated nature of these pages means there is very little consistency or pattern to them, Lidl’s CSR page contains barely 500 words (Lidl, 2017), by contrast, Tesco’s online CSR publicity runs to many hundreds of linked web pages. Such large CSR offerings contain a huge range of initiatives, proffered in many different media forms, including texts, videos, PowerPoint slides, photographs, personal statements, press releases, graphics, music, audio commentaries, statistics and external links—in fact, just about every form of communication technically possible on a computer with screen and sound. A kaleidoscopic mix of every colourful image and sound and words imaginable, and like a kaleidoscope the mix changes every year. Local community initiatives start up and after a year or so are supplanted by something else. A national crisis, poverty, drought, famine, hits the headlines and some supermarket will start a programme to alleviate the suffering, until another national catastrophe supersedes. Even environmental issues change over the years, with the issue of plastic pollution having suddenly shot up the agenda since the TV programme Blue Planet II highlighted the damage being done to marine organisms across the globe in 2017.
However, like a kaleidoscope, the ever-changing patterns all start to look the same after a while. Behind all the variety the big UK supermarkets CSR reports are all rather similar in content, covering what Khan and Kakabadse (2014) call “eight oligopolistic common themes”—namely,
CSR reports all use very similar metalanguage, with striking colourful images and videos, with soundtrack and commentary, frequently championing certain very specific causes—for example, palm oil or Fairtrade bananas. The viewer may get so immersed in the sound and visuals that they forget the specificity of these causes and that many other related issues are not being publicized. For example, there are many endangered species of animal and plant, not only the photogenic Indonesian primates whose habitat is at risk from palm oil plantations. Equally, the range of Fairtrade products, although broadening from the original tea, coffee and bananas into fruit, vegetables, wine and some other foodstuffs, is still absent from the majority of lines sold in large supermarkets. CSR is frequently presented as target driven, with targets either set by the government or the corporation itself (the latter, somehow, always met). It might be preferable to have general principles, linked to wider socio-environmental issues, such as overall global de/re-forestation, the problems with this, maybe some climate change figures, some overall data on tress cover and the contribution made by the company, but this seldom materializes on the website. CSR is also often inward looking, using language such as, “Our business, our customers, enhance our operations, manage our risk, impact of legislation on our business” (Khan & Kakabadse, ibid). Perhaps we need less, but better—better co-ordinated CSR, more long-term programmes, more monitoring and dissemination of results, more engagement with stakeholders outside the supermarket corporations, both forward looking (what do they want in the future) and backwards looking (what did they think to what was done), backed up by consistently presented data.
As we saw earlier, CSR activities tend to be short term, and companies tend not to align their efforts with what other companies, still less their direct competitors, are doing. The most they do is compare efforts to the extent that they can say “we are better than them in this (specific, limited, but gaudily presented) aspect of CSR” In fact, CSR can be simply greenwashing, promoting a planet or society-friendly image in one area whilst continuing with damaging activities across the main part of the business. CSR messages are often rather simplistic, such as “we plant X trees for everyone used in/for every number of kilometres we drive our vehicles”. To properly evaluate this sort of claim, we need to know, inter alia, what sort of trees (conifer monocultures or broadleaf deciduous?) or what land is being taken (was it smallholder farmland, with rich species and crop diversity?). There are seldom any maps to indicate where those trees are being planted; are jobs being destroyed as areas become woodland as opposed to small-scale croplands, what happens to those trees (industrial forestry, tourism, wildlife sanctuary, private forests for some oligarch?) and what associated infrastructure goes with all those new trees (logging roads, tourism burden, industrial sawmills, docks)? Instead, the CSR message frequently includes older people walking by massive ancient oaks, with butterflies and beetles, and idyllic forest mountain scenery. Of course, such scenery cannot be created by man or nature in less than centuries, far longer than any supermarket has been in existence, let alone issuing CSR reports, and within a year or so, a different product will be on the market, a different CSR initiative, a different corporate website will be uploaded, a different idyllic couple or group of skipping children or contented wildlife/happy farm animal. Continuity and specific accountability are notably absent, or if present at all, drowned out by colourful eye-catching statistics and images.
Supermarket CSR publicity often presents an eclectic mix of general promises, such as “unsold food in our stores that is still safe to eat can now be donated to local community organizations where possible” (italics added), along with the opposite, very specific, numerical statistics that are so precise and narrow that they begin to lose context with the wider picture, such as “single carrier bag usage is down by 80%” (both quotes, Morrisons, 2018). Frequently used slogans such as ‘100% British’ do not tell us how this was verified, whether it means reared in the UK or just imported for final processing, or even if this the most environmentally sustainable means of production. From a global social welfare perspective, it might be better to give employment to farm workers in Africa rather than use British labour. From a (British) national productivity perspective, robots might be best, and from a rural economic viewpoint, British workers would be used to maintain the rural economy and services. These subtler comparisons are seldom made on CSR pages. The time element is also missing from many CSR pages, with little comparison with what was attempted last year or before and how much of this was actually achieved. The ‘units’ in which CSR contributions are given may also be vague, for example, “last year we donated a million meals to XYZ charity”. At three meals a day, we may eat 1,100 meals a year, so does a ‘million meals’ equate to feeding 900 destitute people for a year? Or to providing one hot meal a day for 2,800 people? Or to alleviating ‘holiday hunger’, when poor pupils do not receive free school lunches in school holidays, maybe 120 days a year, to 8,000 deprived pupils? These are all very different social initiatives and outcomes. Where a time element does appear, it may be devoid of context or verifiability, such as, “We don’t just buy from the farmers we work with; we work with them to improve their business and ours. To do this more effectively, we established an expert-led programme in 2009” (Morrisons, 2018). What experts, working for whom, achieving what? Meanwhile, Waitrose’s CSR report (Waitrose, 2018a) contained the following section of exciting prose:
Looking beyond compliance, and focussing on our key supply chains, both divisions have made significant progress in the key programmes they have established to address the most salient risks… . Working with the Wilberforce Institute, completed risk assessments on 13 sites in the UK, Spain and Italy growing mushrooms, leeks, cabbages, salad crops, tree fruit and tomatoes. Working with suppliers to drive improvements and share best practice across the supply base. Developed new strategy for the Waitrose Foundation to align it with the business’s sourcing, ethical and technical priorities, address salient human rights risks, and expand to more sourcing countries by 2020. Extensive stakeholder consultation over 2016/17 and attained Management Board sign-off.
Few people will get very far with checking that, let alone evaluating and comparing with other supermarkets and with what really needs to be done, however praiseworthy, sincere and effective the Waitrose/John Lewis Group is with combatting modern slavery in its mushroom and leek supply chains.
The website Business Respect did praise a ten-point CSR programme by Tesco, saying, “Tesco’s ten point plan, typically, are (sic) focused on real substance and have targets attached to them”. The ten points are as follows:
Some of these are indeed specific targets and checkable too, such as 1—but did anyone go back later and check? Even if they did, few enterprises are the same ‘business’ as they were even 12 months ago. Supermarkets open new premises, close old ones, with different levels of energy efficiency (e.g. insulation), change suppliers, alter food chains and routes travelled, so any change up or down in energy use is hard to compare, like with like, with an earlier point in time.
Aims 2 and 6 are less checkable, as they involve knowing how private consumers behave, and 6 is by no means as precise as it appears—run how often, how far, and how long is this routine kept up for?
Aim 7 is vague. What noise levels? And like much CSR would financially benefit the company (fewer larger lorries, less drivers.
Aim 8 carries no commitment. Will the community’s wishes be acted upon once ‘consulted’? Even Aim 10 is unquantified. What is ‘local’? Twenty miles, 50 miles, same country, within Europe? ‘Local’ may vary according to the venue the produce is sold at; for an inner city market, the radius of production would need to be wider than for a rural market town, and for a coastal city, one should increase the radius by 42% over an inland venue. Unfortunately, much CSR material is presented in this rather vague manner, leaving actual verifiable quantifiable action to help the planet or people somewhat thin on the ground.
Leach (2016), in the Gather report, highlights a major flaw in the collective CSR outputs of the UK’s supermarkets: “There is a need to have a stronger and more coherent story at the heart of each report to successfully link the report together”. The Gather report highlights the over-long nature of some CSR statements, and the fact that at heart many CSR initiatives link back to the financial viability of the business. There is an underlying emphasis on maintaining supply chains so customer sales can be kept up, or on reducing energy use, so the fuel or electricity bill can be minimized. There is also a lack of any internationally accepted common standard of CSR, which allows every company to publicize what it chooses, what gives it the most green credit and, in all the profuse detail given by the larger corporations, any omissions will be hard to spot. There is a general business adage, “What gets measured, gets managed”; we need an equivalent, a measurable CSR standard akin to GAAP (Generally Accepted Accounting Principles) for social responsibility statements. A Generally Accepted Responsible Social Principles code, or GARSP code, might contain at least minimum standards on emissions per value of corporate sales, or percentage of materials consumed that originate from sustainable sources, or proportion of suppliers whose employment conditions meet International Labour Organization (ILO) standards. Then we could benchmark companies as to how far they exceed, or fail to meet, these basic global standards. This could be one way to avoid our age of globalized capitalism being the last ‘GARSP’ for the environment, perhaps.
The EU, one of the largest economic and political blocs in the world with a population of over 500 million (third behind China and India) and a gross domestic product of 17 trillion US dollars (second, very close behind the USA), and “the first continent that became a convert to the CSR movement” (Mullerat, 2013: 5), is becoming the regulatory capital of the world. Bradford (2012: 1) describes
the unprecedented and deeply underestimated global power that the European Union is exercising through its legal institutions and standards, and how it successfully exports that influence to the rest of the world. Without the need to use international institutions or seek other nations’ cooperation, the EU has a strong and growing ability to promulgate regulations that become entrenched in the legal frameworks of developed and developing markets alike, leading to a notable “Europeanization” of many important aspects of global commerce.
Even large US companies such as Microsoft, Google and Facebook set their ethical standards by EU regulations (ibid: 3). This is a global version of the California Effect versus the Delaware Effect. Although US companies have a fiscal incentive to locate in Delaware because that state offers the lowest tax requirements, incentivizing cheapness and a race to the bottom, the counteracting California Effect persuades US companies to raise their ethical standards to those demanded by California, because California is a large wealthy state that business wish to have a presence in its domestic market, a ‘race to the top’ (ibid: 5). In terms of economic equity, this could be undesirable, with poorer regions of the world ending up with the polluting, worker-exploiting, corporate operations that are out of sight of the consumer, whilst the wealthier regions get the cleanest most environmentally friendly corporate activities and the most desirable workplaces. It then becomes the role of activists and other NGOs to draw the wealthy consumers’ attention to these poorest regions so standards can be raised there too.
Instituting a major supra-national bloc, such as the EU as global CSR regulator would have several major benefits. Firstly, attempts to develop a higher shared common standard of CSR may be undermined by the refusal of one market player to participate. This then leads to other players opting out, as they perceive the first non-participator to be gaining a financial advantage. As discussed later in this book, there are two opposite effects here. In a very price-competitive market like supermarket food, where market share and economies of scale are of paramount importance and any financial failing is swiftly punished by the shares market, no retail chain wants to voluntarily put itself at a disadvantage (Fox & Vorley, 2004). On the other hand, if the CSR initiative is valued by consumers, the first mover to adopt this policy can gain good publicity (and hopefully gain customers as well) and force its competitors to adopt the same social values. This has happened in the UK with the store chain Iceland and its corporate policies on sustainable palm oil, for example. If a supra-national authority were to encourage the simultaneous adoption of CSR policies by all market players at once, this gaming would come to an end.
Secondly, a common ‘GARSP’ standard would reduce consumer confusion as to who is the greenest. The UK chain Iceland has pioneered social responsibility policies on palm oil and plastic waste, but is ranked by The Good Shopping Guide in the lowest tier of a threefold ‘traffic light’ ethical classification (Good Shopping Guide, 2018). Thirdly, a common internationally adopted set of CSR standards would facilitate tracking of progress by supermarkets towards (or away from) some agreed Gold Standard. Comparisons between the currently variegated and uncoordinated CSR policies of various firms would become much easier. This would be rather like the current competition for market share between, for example, Sainsbury’s and Tesco, except that here every player could aspire to attain 100%.
As of now, major societal and environmental problems connected to and caused by our food chain operations still persist. We still have the obesity crisis, and the numbers of overweight are rising in many countries. Poor working conditions in food production and processing still exist, and producing our food continues to create major environmental and sustainability problems. Persuading people to eat healthily, to demand less processed sugary, fatty, salty food which precipitates expensive health issues years after consumption is still difficult. Of course, we cannot expect private profit-making corporations to achieve, on their own, a Utopian society free from poverty and food-related illness; as Jesus said at Matthew 26:11, “The poor you shall always have with you”. However, the continuation of many social, economic and health problems connected with our globalized food industry, where the supermarkets play a key role at the crucial nexus between producers and consumers, suggests that all is far from well, far from satisfactory, in the supermarket CSR arena.
Individual purchases exert a negligible influence on large corporations but collective consumer choices and action (e.g. boycotts) can change the policies of even the largest multinational companies. This collective action only occurs when some other organization, probably a newspaper or other media channel, or a charity or other NGO, picks up on a cause and creates mass publicity so that hundreds of thousands or even millions of consumers all switch buying habits simultaneously. The decision by the major UK supermarkets to first charge for disposable plastic bags then to start to eliminate them entirely was driven by the UK newspapers and the CPRE. The issue in the early 2010s was the increase in unsightly rubbish in the countryside, roadside verges strewn with plastic detritus and bags caught in tree branches. The anti-plastic bag campaign then received a further massive boost with the TV series Blue Planet II where David Attenborough highlighted the damage discarded plastic was doing to the world’s oceans and their marine wildlife.
Consumer-driven CSR can sometimes be misguided; a notable case was the boycott of Shell petrol stations over the Brent Spar case in 1995, when Greenpeace asserted that a redundant oil platform to be sunk in the North Sea by Shell still contained considerable amounts of crude oil and other chemicals that would eventually escape and harm the environment. The platform was eventually recycled on land, but Greenpeace’s assertions about the harm that would have been done by a deep sea sinking were retracted. In the supermarket food sector, some ‘common-sense’ intuitively correct environmental initiatives may also turn out to be mistaken. Two examples are the notion that warm-climate produce, such as tomatoes grown in Spain and flown into Britain, is worse for the environment than growing this produce in Britain; in fact, the energy used in continuously heating the greenhouses may exceed the one-off fuel used by the aircraft to fly them in. A second fallacy may be that glass bottles are better than plastic; in fact, glass has to be heated to high temperatures to recycle it, and plastic bottles, if collected efficiently, can be shredded and made into a wide variety of other products; glass is also heavier to transport than plastic.
Devinney et al (2006) has suggested the acronym CNSR as the deliberate consumer choice to make or abstain from purchases based on personal and moral beliefs. Properly informed consumer social responsibility could also adopt a version of the 4-P Quadruple Bottom Line, where the ‘P’ for Profit would now stand for ‘Parsimony’. The need for proper information to direct this CNSR implies that both state and non-state actors, governments and NGOs have a significant role to play in persuading the public to influence corporations. The state is a major player and stakeholder in the food chain, and influences diet and health in several ways. The government of the day enacts laws and regulations, imposes taxes and directs local government agencies, state agencies such as schools, hospitals, the armed forces and prisons are major food purchasers, and the costs of a poor diet heavily impact on state finances in terms of NHS costs and lost productivity. The state has significant information resources and can exert significant influence via a range of media channels on people’s food choices.
Government policies on food and CSR will always be coloured by the prevailing political climate, but charities and other NGOs are also seldom free of ‘political’ agendas either. Ideally, then, we need a combination of all these parties acting to inform and persuade public purchasing pressure on companies, exerting checks and balances on each other. Following Devinney, one might term these initiatives CSSR, state social responsibility. A wide variety of methods could be employed, from information releases to nudge theory to fiscal influences, taxing ecologically or socially harmful corporate practices more heavily and rewarding with tax rebates when companies act in the wider socio-environmental interest. The possibilities for such variants and extensions of CSR are explored more fully in Chapter 7. Meanwhile, the next chapter of this book, Chapter 2, explores in more detail the moral, legal and ethical principles of a theory of comprehensive CSR that truly benefits people, community and the environment.