How socially-minded is your average supermarket? Beyond traditional corporate social responsibility, some major UK and European supermarkets are making notable strides in integrating the concept of social sustainability into their business decisions.
A key focus is around strengthening communities and promoting diversity. Examples include German-owned Metro Group funding food bank networks across Europe, Asda opening up complimentary store space for use by community groups, and Tesco championing LGBT rights at front-of-store.
But scaling up such pioneering endeavours is undoubtedly challenging. “Social sustainability is not driven in a coordinated way which relates directly to supermarket behaviour – there is no equivalent to the Courtauld Commitment for social sustainability,” notes Anne-Marie Bremner, director at Encycle Consulting.
But for one major food retailer, Migros – Switzerland’s largest supermarket - the focus has been on society since 1925. The primary goal of this huge co-operative group, which is collectively owned by more than two million members, is to improve the quality of life for all of its customers.
Migros’ founder, Gottlieb Duttweiler, started out by sending mobile shops onto the streets to sell six basic products at very low prices. By cutting out the middle man, he built a closer bridge between customer and producer.
These values, built on fair price and informed consumption, has seen Migros prosper in its native country. It is now Switzerland’s largest private employer and has enjoyed steady revenue growth.
Its strong emphasis on vertically integrated supply chains – 45% of Migros’ turnover is generated by own brand products – has enabled the group to localise production where possible, increase sales of organic and sustainably-certified products, and demonstrate leadership on big-ticket issues, such as palm oil, with the group being one of the founding members of the Roundtable on Sustainable Palm Oil (RSPO).
But what makes the company truly unique is its long history of social sustainability, delivered through programmes like Culture Percentage and the Migros Aid Fund. Every year, Migros’ retailing division contributes almost 1% of its sales revenue to various social projects throughout Switzerland, regardless of how the business has performed.
Of the CHF122.3m (£89.7m) invested into Culture Percentage during 2014, nearly half went into improving access to education through initiatives like the Migros Club School. Culture is also heavily promoted; festivals, events and permanent recreational spaces have all been delivered through the programme.
“Our belief is to give something back to society that’s not commercially driven,” says Migros’ director of sustainability, Cornelia Diethelm. “It’s about linking to values, not strategy. Social sustainability is something that needs to be independent from your core business.”
She reflects on the co-operative’s long-term vision. “If you want to make a difference in the long run, you have to focus on society. You are only credible if you are doing this over 10, 20, 30, 40, 50 years.”
In 2014, Migros was rated the “world’s most sustainable retailer” by Oekom Research in its annual global retail analysis, which surveyed 140 firms. Migros achieved a B+, the best score in the sector, on a grading scale from A+ to D-.
Ulrike Funk, senior analyst at Oekom, says Migros demonstrated “convincing and above average efforts” when judged against the social barometers of labour standards and working conditions, both internally and in the supply chain. The company had “profound guidelines and measures in place” for staff issues such as freedom of association and work-life balance.
“The vast majority of Migros’ employees are located in Switzerland where comparatively high legal standards with regard to several labour-related topics exist,” says Funk. “A high number of employees are covered by a collective bargaining agreement, setting high standards with regard to payment, working time, occupational health and safety, and protection in restructuring.”
Migros also ranks well in the eyes of shoppers. James Cashmore, director at Envero Insights, which collects consumer insights through its Brand Trust Index, says the supermarket enjoys “exceptional levels of brand trust and recommendation amongst Swiss consumers”.
He believes this puts Migros ahead of most, if not all, other European supermarkets. “What is unusual about Migros is the sheer scale, longevity and consistency of its commitment, through a multiplicity of programmes, to its role as a force for good in Swiss society.”
Like other co-operatives, Migros arguably benefits from an operational structure built around shared ownership, but Cashmore maintains that shareholder-owned businesses can also stand out when it comes to driving positive social action. “The ones that get most attention and earn most credit from consumers are activities, programmes and behaviours that couldn’t possibly be driven by a commercial or shareholder motive.”
Trewin Restorick, CEO of sustainability campaigning group Hubbub, says Migros’ approach feels very authentic. “It provides a strong overall narrative backed up by solid examples over a period of time. Crucially it appears as if the values cover all aspects of the business from supply chain through to community engagement. Other supermarkets might reflect on this overall commitment.”
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