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Ethical and Green Retailing - UK - September 2009

This report focuses on consumer awareness of the issues and how their behaviour has changed in response to changing economic and environmental conditions. It identifies whether consumer action on environmental issues is increasing and assesses whether retailers need to do more on environmental and ethical issues as a consequence.

Key issues covered in the analysis:

  • The economy is in recession and key indicators, such as rising unemployment, suggest that many more households are going to be adversely affected before the economic cycle begins to swing upwards.

  • Climate change and the consumption of resources at unsustainable rates remain issues that have a much longer-term perspective than an economic downturn (even if it were to last three or five years), especially as leading retailers acknowledge that action on climate change is failing and that on current trends, targets to reduce carbon footprint are not going to be met.

  • The retail industry, although not in itself a massive consumer of energy or generator of greenhouse gases relative to other industries, is expected to be at the forefront of action on climate change because it is at the heart of consumerism.

  • Retailers complete the link in the supply chain from manufacturer to consumer and as such have a clear responsibility to deliver environmentally friendlier and ethically sourced products that consumers can trust.

  • Nevertheless, retailers have to fulfil their commercial objectives for growth epitomised by sustained store expansion, especially among the biggest companies that continue to grow their market share, and this means many leading businesses have a growing carbon footprint at a time when green-minded consumers might have hoped (or expected) the reverse to be true.

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Table of contents

  1. Issues in the Market

      • Main themes
        • Definition
          • Retail Sales data
            • Abbreviations
            • Future Opportunities

              • Giving shoppers more reasons to buy ‘green’
                • Taking green consumerism to the next stage
                  • Making information more meaningful
                  • Market in Brief

                    • Consumer resolve weakened by the impact of recession
                      • Consumers less inclined to pay green or ethical price premiums
                        • Not all retailers delivering improvements
                          • Major reductions in carbon emissions planned in the next ten years
                            • Increase in environmental legislation is forcing retailers to take action
                              • Retailers’ green initiatives not improving levels of consumer trust
                                • Momentum building for greener living
                                  • Consumer support for recycling and waste reduction remains widespread
                                  • Internal Market Environment

                                    • Key points
                                      • Top priorities for retailers are energy efficiency and emissions reduction
                                        • Measuring environmental impact
                                          • But not all companies make this information available
                                            • Will disclosure become mandatory?
                                              • Who has the highest carbon intensity?
                                                • Who is making the most progress on carbon intensity?
                                                  • Figure 1: Percentage annual change in absolute and relative carbon emissions 2007/08-2008/09
                                                • Waste reduction a key objective
                                                  • Who generates the most waste relative to sales?
                                                    • Figure 2: Waste relative to sales, 2006/07-2008/09
                                                  • Helping to reduce post-consumer waste by design and specification
                                                    • HFCs – supermarkets refrigeration under scrutiny
                                                      • Sustainable sourcing factors and issues
                                                        • Local sourcing factors and issues
                                                          • Ethical sourcing factors and issues
                                                            • Is Fairtrade fair?
                                                              • The market for green and ethical products has shown strong growth
                                                                • More recent trends convey mixed messages
                                                                • Broader Market Environment

                                                                  • Key points
                                                                    • Climate Change Act now law
                                                                      • Carbon Reduction Commitment effective in April 2010
                                                                        • Climate change legislation stimulating greener products
                                                                          • Rising unemployment – a catalyst for change?
                                                                            • Use of financial instruments to stimulate greener buying behaviour
                                                                              • Carbon labelling rising up the agenda
                                                                                • Waste reduction driven by government
                                                                                  • Carrier bags – 50% reduction target nearly hit
                                                                                    • Recession undermining UK recycling strategy
                                                                                    • Who’s Innovating?

                                                                                      • Key points
                                                                                        • Greener store initiatives
                                                                                          • Greener packaging
                                                                                            • Refillable and returnable packaging
                                                                                              • Compostables an alternative to recyclable
                                                                                                • Unambiguous labelling
                                                                                                  • Greener services
                                                                                                    • Waitrose wants bikers
                                                                                                      • Offsetting (online) spending
                                                                                                        • Greener products
                                                                                                        • Top 12 UK Retail Groups’ Ethical and Green Strategies

                                                                                                          • Key points
                                                                                                            • Tesco
                                                                                                              • J Sainsbury
                                                                                                                • Asda
                                                                                                                  • Morrisons
                                                                                                                    • Co-operative Group
                                                                                                                      • Marks & Spencer
                                                                                                                        • Alliance Boots
                                                                                                                          • John Lewis Partnership
                                                                                                                            • Home Retail Group
                                                                                                                              • DSG International
                                                                                                                                • Kingfisher
                                                                                                                                  • Next
                                                                                                                                  • The Importance of Ethical and Environmental Issues to Consumers

                                                                                                                                    • Key points
                                                                                                                                      • Retailers know that consumers really do have a conscience
                                                                                                                                          • Figure 3: Trends in lifestyle statements on social/political/ethical and environmental issues, 2005-09
                                                                                                                                        • Ethical and green issues important to a majority of respondents
                                                                                                                                          • More people rate these issues as important than 12 months ago
                                                                                                                                              • Figure 4: Importance attached to ethical and environmental issues when shopping, March 2007, June 2008 and July 2009
                                                                                                                                            • Widespread basis of concern
                                                                                                                                              • Minor bias to more affluent consumers
                                                                                                                                                • As many Es as ABs rate these issues as very important
                                                                                                                                                  • Young affluent consumers need reminding of their responsibilities
                                                                                                                                                    • Children a catalyst for change
                                                                                                                                                    • Which Retailers Do Consumers Trust?

                                                                                                                                                      • Key points
                                                                                                                                                        • Retailers slowly building trust
                                                                                                                                                          • Only John Lewis/Waitrose built trust in both 2008 and 2009
                                                                                                                                                            • No gain from Plan A for Marks & Spencer
                                                                                                                                                              • Boots significantly underperforming
                                                                                                                                                                • Primark has not suffered from bad publicity
                                                                                                                                                                  • Figure 5: Consumer trust in retailers, March 2007, June 2008 and July 2009
                                                                                                                                                                • Co-op must trusted relative to use
                                                                                                                                                                    • Figure 6: Consumer trust in retailers compared to usage, June 2009
                                                                                                                                                                • What People Think About Green and Ethical Issues

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Clothing shoppers seeking reassurance
                                                                                                                                                                      • Delegated trust
                                                                                                                                                                        • Widespread cynicism
                                                                                                                                                                          • Increasing reasons to buy
                                                                                                                                                                            • Risk of a backlash greater on ethical than environmental failings
                                                                                                                                                                              • Organic foods under pressure in the recession
                                                                                                                                                                                • Organic – increasing reasons to buy
                                                                                                                                                                                  • Nearly one in five cannot afford to be green or ethical
                                                                                                                                                                                    • Figure 7: Consumer attitudes towards ethical and environmental issues, July 2009
                                                                                                                                                                                  • Widespread demand for reassurance on ethical provenance
                                                                                                                                                                                    • Enlightened self-interest widely recognised
                                                                                                                                                                                      • Risk of boycotts greatest among more affluent
                                                                                                                                                                                        • ABs and families prominent in cutting back on organic foods
                                                                                                                                                                                          • Younger people ignoring the issues due to financial pressures
                                                                                                                                                                                            • Leading clothing retailers stand to gain from stronger ethical labelling
                                                                                                                                                                                              • Response to ethically-inspired boycotts strong among shoppers of leading retailers
                                                                                                                                                                                                • Impact of economic downturn on attitudes and behaviour
                                                                                                                                                                                                  • Figure 8: Statements agreed on ethical and environmental issues – any adverse reaction to financial constraints (netted), July 2009
                                                                                                                                                                                                • Greater numbers of less affluent people affected
                                                                                                                                                                                                  • Cost and convenience override green and ethical issues
                                                                                                                                                                                                    • ABC1 pre-families and families directly affected
                                                                                                                                                                                                    • Has People’s Buying and Behaviour Got Greener?

                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                        • More consumers actively going green
                                                                                                                                                                                                          • Disposable bags on the way out
                                                                                                                                                                                                            • Need for consistency
                                                                                                                                                                                                              • Car use under pressure – but fuel price growth less of an issue
                                                                                                                                                                                                                • No increase in interest in carbon labelling
                                                                                                                                                                                                                  • Figure 9: Greener behaviour and buying, June 2008 and July 2009
                                                                                                                                                                                                                • Green momentum building
                                                                                                                                                                                                                  • Figure 10: Repertoire of effort to be more environmentally-friendly, July 2009
                                                                                                                                                                                                                • Pre-family adults lagging in the conversion to low-energy bulbs
                                                                                                                                                                                                                  • Younger people and men less likely to be using reusable bags
                                                                                                                                                                                                                    • Switching off the standby mode has broad appeal
                                                                                                                                                                                                                      • Less affluent householders slowest to adopt energy-saving technology in the home
                                                                                                                                                                                                                        • Most affluent are cutting down on car use
                                                                                                                                                                                                                          • M&S, Co-op and Morrisons shoppers have highest take-up of reusable bags among grocers
                                                                                                                                                                                                                            • Carbon labelling hot spots
                                                                                                                                                                                                                            • Perceptions of Packaging and Recycling

                                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                                • Awareness and responsiveness to packaging issues high
                                                                                                                                                                                                                                  • Sustained levels of active recycling
                                                                                                                                                                                                                                    • Complacency about rubbish and recycling?
                                                                                                                                                                                                                                      • Packaging issues not important enough to influence shopping behaviour
                                                                                                                                                                                                                                        • Sustained interest in reusables
                                                                                                                                                                                                                                          • Time to consider other packaging options
                                                                                                                                                                                                                                            • Low levels of confusion about recyclable materials…
                                                                                                                                                                                                                                              • … but people want retailers to do more to reduce waste
                                                                                                                                                                                                                                                • Recyclable packaging needs local support
                                                                                                                                                                                                                                                  • Figure 11: Consumer attitudes towards packaging and recycling, July 2009
                                                                                                                                                                                                                                                • Men and younger people lag behind on recycling
                                                                                                                                                                                                                                                  • Retailers held responsible for the amount and recyclability of packaging
                                                                                                                                                                                                                                                    • Widespread support for reusable bottles
                                                                                                                                                                                                                                                      • All shoppers demanding on-packaging specification
                                                                                                                                                                                                                                                        • Shoppers of all the leading grocers are supportive of reusables
                                                                                                                                                                                                                                                        • Appendix – Internal Market Environment

                                                                                                                                                                                                                                                            • Figure 12: Leading 12 retailers’ turnover, 2006/07-2008/09
                                                                                                                                                                                                                                                            • Figure 13: Leading 12 retailers’ trading area, 2006/07-2008/09
                                                                                                                                                                                                                                                            • Figure 14: Leading 12 retailers’ CO2 emissions, 2006/07-2008/09
                                                                                                                                                                                                                                                            • Figure 15: Leading 12 retailers’ CO2 emissions relative to turnover, 2006/07-2008/09
                                                                                                                                                                                                                                                            • Figure 16: Leading 12 retailers’ CO2 emissions relative to space, 2006/07-2008/09
                                                                                                                                                                                                                                                            • Figure 17: Leading 12 retailers’ waste generated relative to turnover, 2006/07-2008/09
                                                                                                                                                                                                                                                        • Appendix – The Importance of Ethical and Environmental Issues to Consumers

                                                                                                                                                                                                                                                            • Figure 18: Agreement with lifestyle statements on social/political/ethical and environmental issues, by demographics, 2009
                                                                                                                                                                                                                                                            • Figure 19: Agreement with lifestyle statements on environmental issues, by demographics, 2009
                                                                                                                                                                                                                                                            • Figure 20: Agreement with lifestyle statements on environmental issues, by demographics, 2009
                                                                                                                                                                                                                                                            • Figure 21: Importance of climate change, environment and ethical issues when shopping, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 22: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 23: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 24: Importance of climate change, environment and ethical issues when shopping, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 25: Stores visited in the last 12 months, by importance of climate change, environment and ethical issues when shopping, July 2009
                                                                                                                                                                                                                                                        • Appendix – What People Think About Green and Ethical Issues

                                                                                                                                                                                                                                                            • Figure 26: Attitudes towards ethical and environmental issues, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 27: Attitudes towards ethical and environmental issues, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 28: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 29: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 30: Attitudes towards ethical and environmental issues, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 31: Stores visited in last 12 months, by attitudes towards ethical and environmental issues, July 2009
                                                                                                                                                                                                                                                            • Figure 32: Stores visited in the last 12 months, by attitudes towards ethical and environmental issues, July 2009
                                                                                                                                                                                                                                                            • Figure 33: Agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints (netted), by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 34: Stores visited in last 12 months, by agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints (netted), July 2009
                                                                                                                                                                                                                                                            • Figure 35: Repertoire of agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints, July 2009
                                                                                                                                                                                                                                                            • Figure 36: Repertoire of agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 37: Attitudes towards ethical and environmental issues, by repertoire of agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 38: Stores visited in last 12 months, by repertoire of agreement with statements on ethical and environmental issues – any adverse reaction to financial constraints, by demographics, July 2009
                                                                                                                                                                                                                                                        • Appendix – Has People’s Buying and Behaviour Got Greener?

                                                                                                                                                                                                                                                            • Figure 39: Efforts to be more environmentally-friendly, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 40: Efforts to be more environmentally-friendly, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 41: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 42: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 43: Efforts to be more environmentally-friendly, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 44: Stores visited in last 12 months, by efforts to be more environmentally-friendly, July 2009
                                                                                                                                                                                                                                                            • Figure 45: Repertoire of efforts to be more environmentally-friendly, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 46: Efforts to be more environmentally-friendly, by repertoire of efforts to be more environmentally friendly, July 2009
                                                                                                                                                                                                                                                        • Appendix – Perceptions of Packaging and Recycling

                                                                                                                                                                                                                                                            • Figure 47: Agreement with statements on packaging and recycling, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 48: Agreement with statements on packaging and recycling, by demographics, July 2009
                                                                                                                                                                                                                                                            • Figure 49: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 50: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 51: Agreement with statements on packaging and recycling, by stores visited in last 12 months, July 2009
                                                                                                                                                                                                                                                            • Figure 52: Stores visited in last 12 months, by agreement with statements on packaging and recycling, July 2009
                                                                                                                                                                                                                                                            • Figure 53: Stores visited in last 12 months, by agreement with statements on packaging and recycling, July 2009

                                                                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                                                                        • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                                                                                                        • Alliance Boots UK Retail
                                                                                                                                                                                                                                                        • Amazon.co.uk
                                                                                                                                                                                                                                                        • Argos
                                                                                                                                                                                                                                                        • Asda Group Ltd
                                                                                                                                                                                                                                                        • British Gas
                                                                                                                                                                                                                                                        • British Market Research Bureau (BMRB)
                                                                                                                                                                                                                                                        • British Retail Consortium
                                                                                                                                                                                                                                                        • Carbon Trust
                                                                                                                                                                                                                                                        • Carpetright UK
                                                                                                                                                                                                                                                        • Co-operative Group
                                                                                                                                                                                                                                                        • Comet Group Ltd
                                                                                                                                                                                                                                                        • Currys
                                                                                                                                                                                                                                                        • Debenhams Total (GTV)
                                                                                                                                                                                                                                                        • Department for Environment, Food & Rural Affairs
                                                                                                                                                                                                                                                        • Dixons Retail Plc
                                                                                                                                                                                                                                                        • Dobbies Garden Centres plc
                                                                                                                                                                                                                                                        • Fairtrade Foundation (The)
                                                                                                                                                                                                                                                        • Food Standards Agency
                                                                                                                                                                                                                                                        • HMV Retail Ltd
                                                                                                                                                                                                                                                        • Home Retail Group
                                                                                                                                                                                                                                                        • Homebase Ltd
                                                                                                                                                                                                                                                        • IKEA
                                                                                                                                                                                                                                                        • ITV plc
                                                                                                                                                                                                                                                        • J. Sainsbury
                                                                                                                                                                                                                                                        • John Lewis Partnership
                                                                                                                                                                                                                                                        • Kingfisher Group
                                                                                                                                                                                                                                                        • Kingfisher UK & Ireland
                                                                                                                                                                                                                                                        • Lakeland Ltd
                                                                                                                                                                                                                                                        • LEAF
                                                                                                                                                                                                                                                        • LEGOLAND Windsor Park Ltd
                                                                                                                                                                                                                                                        • Lidl (UK)
                                                                                                                                                                                                                                                        • Marine Stewardship Council
                                                                                                                                                                                                                                                        • Marks & Spencer
                                                                                                                                                                                                                                                        • Neff
                                                                                                                                                                                                                                                        • Netto Foodstores Ltd
                                                                                                                                                                                                                                                        • Next Group
                                                                                                                                                                                                                                                        • Npower Limited
                                                                                                                                                                                                                                                        • One Stop Community Stores Ltd
                                                                                                                                                                                                                                                        • OXFAM
                                                                                                                                                                                                                                                        • PC World (DSG UK Computing)
                                                                                                                                                                                                                                                        • Primark Stores Ltd
                                                                                                                                                                                                                                                        • Robert Bosch Ltd
                                                                                                                                                                                                                                                        • Screwfix UK
                                                                                                                                                                                                                                                        • Soil Association
                                                                                                                                                                                                                                                        • Tesco Plc
                                                                                                                                                                                                                                                        • The Carphone Warehouse Ltd
                                                                                                                                                                                                                                                        • Waitrose
                                                                                                                                                                                                                                                        • Wal-Mart Stores, Inc
                                                                                                                                                                                                                                                        • Waste & Resources Action Programme (WRAP)
                                                                                                                                                                                                                                                        • Wm Morrison Supermarkets

                                                                                                                                                                                                                                                        Ethical and Green Retailing - UK - September 2009

                                                                                                                                                                                                                                                        £1,695.00 (Excl.Tax)