RETAIL: NEWS

M&S bids to become the green retailer of choice
Marks & Spencer is embarking on a major new strategy to define itself as the UK’s most environmentally sound high street retailer. The company has pledged £200 million to  a 100-point “eco-plan” that will make it a carbon-neutral organisation by 2012. The plan was drawn up by a former director of Friends of the Earth, Jonathon Porritt, who said that M&S will “set a new benchmark”.

The multifaceted approach (which rather incongruously ties together environmental sustainability and fair trade issues) will include such initiatives as: reducing energy consumption; stopping the use of landfill sites; 100% recyclable packaging; more local sourcing; more products made from recycled raw materials; and using food waste to generate power.

Notably, chief executive Stuart Rose has promised that “carbon off-setting” will only be used when no sustainable alternative is viable – in line with the advice offered by Garry Felgate of the Carbon Trust in last month’s issue of the drinks business.

The move marks a major change in policy for M&S. The retailer has recognised that consumers are increasingly aware of environmental issues and believes this factor will become more important in purchasing decisions. It will be highlighted in a major marketing push from March.

M&S has stated that the cost of these changes will not be passed on to consumers. This suggests that while consumers are increasingly attracted to environmentally sound companies, businesses are not yet confident that consumers are willing to bear the associated costs. The £200m cost over a five-year period represents 0.5% of turnover.

MPs unite against discounters
Heavy discounting of beer in the off-trade has become the focus of a debate in Parliament. An Early Day Motion calling on supermarkets to stop selling cheap lager as a loss-leader has won the support of 46 MPs.

The campaign, launched by The Publican, has also earned the backing of senior members of the police force, as well as the Campaign for Real Ale, CAMRA.

“The ridiculous practice of major supermarkets selling below cost to out-price each other is reckless, irresponsible and dangerous,” said CAMRA chief executive Mike Benner. CAMRA has recorded lager being sold at the equivalent of just 54p per pint. “Something has to be done now to make the supermarkets realise the damage these promotions can cause,” he added.

The EDM states: “This House believes that the substantial price differential between alcohol sold in pubs and that sold in the off-trade is exacerbating the problem of binge drinking.”

Merry Xmas for supermarkets as champagne shines
The tns Worldpanel figures for the last quarter reveal that the major multiples rallied during December to register strong pre-Christmas trading. Prior to the festivities the mood was pessimistic, with retailers expecting a relatively poor performance. However, Santa delivered the grocers just what they were hoping for, with turnover up 5% compared to the previous year.

Waitrose delivered the strongest growth of the big five (albeit from the smallest base), with an 11% increase that gave it a 3.9% share of the Christmas market.

Champagne proved to be one of the biggest hits of the festive season, with a host of retailers recording record sales of fizz. Morrisons’ Champagne sales shot up an impressive 40% year on year, while Tesco was up 29%. Majestic sales rose by 17% and Sainsbury’s recorded 15% growth in the category.

Rivals consider collaboration
Two of the country’s leading supermarket chains – Asda and Sainsbury’s – have held discussions about potential opportunities to collaborate. The exploratory talks centred on the possibility of using a shared distribution centre to increase the efficiency of both businesses.

Asda chief executive Andy Bond has championed the idea of the chains cooperating on non-competitive elements of their operations. “We’re a bloody competitive lot,” he said. “But for green issues or cost savings we should find the balance between competition and collaboration.” Citing the fact that the potential of distribution warehouses is often not fully maximised, he commented, “The whole of the logistics chain is one of the biggest areas of opportunity.”

According to reports in The Sunday Times, a meeting took place “last summer”, but did not proceed because the two parties could not agree on a location. Sainsbury’s has confirmed talks took place, while Asda claims the proposal is still “live”.

© db February 2007