Stay ahead of the curve and future-proof your business with Mintel’s UK Ethical Retailing Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest ethical retail market research, trends and consumer behaviours affecting your business. Get a 360° view of the ethical retail market to help you align your business strategy with the needs of your audience.
Ethical Retail Market: Overview
Shopping for ethical products has become less of a priority for consumers due to the cost of living crisis. In a climate where the price of a product is more important than how ethical it is. As a result, retailers need to work hard at convincing the value of ethically produced products over standard ones.
- Ethical retail market size: Ethical claims on product launches accounted for 21% in 2022, up from 19.5% a year before.
Ethical Retail Market: Opportunities and Challenges
Popularity of recycling
Recycling is the most common type of ethical behaviour for consumers to engage in. The popularity of recycling is accentuated by companies prioritising this as part of their wider sustainability goals for reducing single-use plastic packaging and giving a lending hand for consumers to do the same.
- Ethical retail market trends: 62% of consumers have recycled used products in the past 12 months.
Call for accountability
Consumers are also calling for accountability when it comes to making ethical claims. Many are confused by ethical claims or don’t trust retailers to be completely transparent about their sustainability commitments. Retailers should have an active role in making ethical claims more comprehensible.
- Ethical retail market opportunity: 76% think there should be more legal restrictions on ethical claims made by retailers.
To learn more about the ethical retail market, including consumer behaviour analysis, and market opportunities recommendations, purchase our full UK Ethical Retail Market Report.
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Expert Insights from a Research Analyst
This report, written by Emily Viberg, a leading research analyst, delivers in-depth commentary and analysis to highlight trends in the ethical retail market and add expert context to the numbers.
An emphasis should be on the financial benefits of shopping ethically which are not always apparent to consumers. Retailers also have some way to go in eliminating confusion about ethical claims and consumers are calling on more legislation to hold companies accountable and for retailers to take a lead on transparency.”
Emily Viberg
Retail analyst
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Overview
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Executive Summary
- The Market
- Consumers’ financial wellbeing has fallen from the highs of 2021…
- Figure 1: Household financial wellbeing index, 2016-23
- Consumer spending power will be curbed
- People are environmentally aware
- Figure 2: Key factors driving consumer behaviour around Surroundings, 2023
- Companies and brands
- Ethical claims increase 7.7% in 2022
- Figure 3: Ethical claims on products between 2018-2023
- Environmentally friendly packaging is a top ethical claim
- Figure 4: Leading ethical claims by type, 2022
- Selfridges reveals ‘The Stock Market’ pre-loved pop-up
- Figure 5: The Stock Market pop-up, 2023
- Grocers help consumers manage food waste
- Asda creates dedicated page to provide hints and tips on how to prevent food waste
- Figure 6: Asda food waste webpage, 2023
- The consumer
- Promoting fair treatment of workers best defines an ‘ethical retailer’
- Figure 7: Aspects that best define an ethical retailer, 2023
- Over three fifths have recycled used products in the past 12 months
- Figure 8: Ethical shopping behaviours and future interests when shopping ethically, 2023
- Recycling areas in-stores is a must-have for retailers
- Figure 9: Ethical services that would encourage consumers to choose one retailer over another, 2023
- Get the ethical shopping mix right
- Figure 10: TURF Analysis – Ethical Retailing, April 2023
- Make ethical products affordable
- Figure 11: What would make consumers chooses ethical products over standard ones, 2023
- Cost-of-living crisis hampers consumer’s ethical agendas
- Figure 12: Cost-driven ethical behaviours, 2023
- Consumers want more legislation from governments but look to retailers for clarity on claims
- Figure 13: Ethical Behaviours, 2023
- Pricing should reflect the quality of ethical products
- Figure 14: Value-led ethical behaviours, 2023
- Consumers willing to switch if its means they can buy more ethically
- Figure 15: Ethical shopping behaviours, 2023
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Issues and Insights
- Appeal to cost-driven shoppers and highlight the financial benefits of shopping ethically
- Couple ethical claims with saving benefits
- A ‘less is more’ approach signals higher quality products
- Make ethical products more affordable through incentives and rewards
- Clear up confusion of ethical claims to empower consumers
- Increase credibility for ethical claims through better transparency
- Empower shoppers to make the ethical choice
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Ethical New Product Development and Innovation
- Ethical claims increase 7.7% in 2022
- Figure 16: Ethical claims on products between 2018-2023
- Environmentally friendly packaging top ethical claim
- Figure 17: Leading ethical claims by type, 2022
- Project Cosmetics prints packaging with soy ink
- Figure 18: Example of innovating packaging, 2023
- Nuddy’s straightforward packaging helps simplify claims
- Figure 19: Example of simple on-pack language, 2023
- Sainsbury’s continues its commitment to reduce plastic from its own products
- Figure 20: Examples of Sainsbury’s products with reduced plastic, 2023
- Colour cosmetics top product category for ethical claims
- Figure 21: Leading product categories with ethical claims, 2022
- Victoria Beckham launches sustainably-minded colour cosmetics
- Figure 22: Example of sustainable cosmetics by Victoria Beckham, 2023
- Skincare brands highlight their sustainability ethos
- (Figure 23: Examples of brands with strong sustainability ethos, 2023
- Ethical claims increase 7.7% in 2022
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Ethical Retail Launch Activity
- Selfridges reveals ‘The Stock Market’ pre-loved pop-up
- Figure 24: The Stock Market pop-up, 2023
- eBay launches ‘Better Than New Homewares’ Hub
- John Lewis adds maternitywear to rental offer
- Figure 25: John Lewis maternity rental wear, 2023
- Decathlon rolls out rental service to all its stores
- Grocers help consumers manage food waste
- Asda creates dedicated pages to provide hints and tips on how to prevent food waste
- Figure 26: Asda food waste webpage, 2023
- M&S to remove ‘use by’ dates on milk in bid to reduce waste
- Retailers close the loop
- Primark launches first circular product range in order to “give clothes a longer life”
- Coach reveals new circular sub-brand
- Figure 27: Coach’s circular Coachtopia brand, 2023
- Milk & More team up with reusable packaging start-up Again
- Inclusivity and diversity matter
- L’Oréal and Lancôme’s unveil ‘HAPTA’
- Figure 28: The HAPTA device, 2023
- Dove launches #TurnYour Back campaign
- Levi’s test AI-generated models to ‘increase diversity’
- Selfridges reveals ‘The Stock Market’ pre-loved pop-up
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Regulatory and Legislative Changes
- Environmental Land Management Schemes replace CAP farm subsidies
- COP15 sets goal to protect 30% of land and waters
- DRS in Scotland delayed to March 2024
- Plastic Packaging Tax comes into force, Extended Producer Responsibility due in 2024
- Reforms aim to reduce landfill and drive recycling rates
- Courtauld Commitment 2030 spans food waste, greenhouse gas emissions and water stress
- EU to make companies accountable for their supply chains
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Brand Research
- Lush takes the lead on ethicality
- Figure 29: Lush Shop Again store at its Green Hub, 2023
- Figure 30: Lush Refugees Welcome bath bomb, 2023
- Boots helps support women’s health
- M&S champions ‘British made’
- Figure 31: Top ranking of selected retail brands*, by agreement with “ethical”, 2021-23
- Shein looks to combat negative brand perceptions
- Primark works on its sustainability credentials
- Figure 32: Top ranking of selected retail brands*, by agreement with “unethical”, 2021-22
- Brand research methodology
- Lush takes the lead on ethicality
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Market Drivers
- Inflation will continue to eat into consumer spending power over the course of 2023
- High inflation and rising interest rates will compound the impact of the slowing recovery
- Consumer spending power will be curbed
- Consumers’ financial wellbeing has fallen from the highs of 2021…
- Figure 33: Household financial wellbeing index, 2016-23
- …and most people are feeling the effects of price rises
- People are environmentally aware
- Figure 34: Key factors driving consumer behaviour around Surroundings, 2023
- Eating less meat helps the planet and people’s pockets
- Figure 35: Benefits associated with eating less meat, 2022
- Accessibility the main barrier for refill usage amongst BPC shoppers
- Figure 36: Reasons for not using/being interested in BPC refill concepts, 2022
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Defining Ethical Retailers
- Promoting fair treatment of workers best defines an ‘ethical retailer’
- Promoting sustainability is a top criterion for ethical retailing
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- Figure 37: Aspects that best define an ethical retailer, 2023
- Equity, diversity and inclusivity matter to 16-34s
- Figure 38: Aspects that best define an ethical retailer, by age, 2023
- Promoting sustainability and having ethically certified products are defining aspects for over 55s
- Figure 39: Percentage of consumers who think ‘promotes sustainability’ and has ‘ethically certified products’ best define an ethical retailer, by age, 2023
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Ethical Shopping Behaviours
- Over three fifths have recycled used products in the past 12 months
- Buying locally produced products is a good way to support the environment
- Three in ten are interested in saving food destined for landfill
- Figure 40: Ethical shopping behaviours and future interests when shopping ethically, 2023
- 16-34s look to close the loop
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- Figure 41: Percentage of consumer who have bought second-hand products and/or sold unwanted clothes, by age, 2023
- Over 55s upcycle and buy locally produced products
- Figure 42: Percentage of consumers who have upcycled, recycled and/or bought locally produced products, by age, 2023
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Ethical Efforts by Retailers Consumers Want
- Recycling areas in-stores is a must-have for retailers
- Incentives will help make ethical behaviours a habit
- Transparency needs to be a focus to gain trust from shoppers
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- Figure 43: Ethical services that would encourage consumers to choose one retailer over another, 2023
- Get the ethical shopping mix right
- Figure 44: TURF Analysis – Ethical Retailing, April 2023
- Hybrid workers look for sustainable delivery options
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- Figure 45: Percentage of consumers who would be encouraged by sustainable delivery options when choosing to shop at one retailer over another, by current working situation, 2023
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Consumers Choose Ethical Products Over Standard Ones When…
- Make ethical products affordable
- Make choosing ethical products rewarding
- Iron out inconveniences when shopping for ethical products
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- Figure 46: What would make consumers chooses ethical products over standard ones, 2023
- Get the ethical product mix right
- Figure 47: TURF Analysis – Ethical Retailing, April 2023
- Price and quality matter for 16-34s when choosing between ethical and standard products
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- Figure 48: What would make consumers chooses ethical products over standard ones, by age, 2023
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Cost-of-Living Crisis and Ethical Retailing
- Cost-of-living crisis hampers consumer’s ethical agendas
- Figure 49: Cost-driven ethical behaviours, 2023
- Ethical agenda falls down in priority for lower earners
- Figure 50: : Ethical Retailing – CHAID – Tree output, April 2023
- Cost-of-living crisis hampers consumer’s ethical agendas
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Ethical Retailing Behaviours
- Consumers want more legislation from governments but look to retailers for clarity on claims
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- Figure 51: Ethical Behaviours, 2023
- Pricing should reflect the quality of ethical products
- Figure 52: Value-led ethical behaviours, 2023
- Consumers willing to switch if its means they can buy more ethically
- Figure 53: Ethical shopping behaviours, 2023
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- CHAID Analysis
- Methodology
- How to read the CHAID Tree
- Figure 54: Ethical Retailing – CHAID – Table output, April 2023
- TURF Analysis on factors that would make consumers chose an ethical product over a standard one
- Methodology
- How to read the TURF analysis
- Figure 55: Table – TURF Analysis – Ethical Retailing, April 2023
- TURF Analysis on what factors would make consumers choose to shop at one retailer over another
- How to read the TURF analysis
- Figure 56: Table – TURF Analysis – Ethical Retailing, April 2023
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