Assessing the sustainability of the biggest German supermarkets

Summary

Problem definition: The global food system is responsible for 26-34% of global greenhouse gas emissions. Furthermore, it has substantial negative impacts on biodiversity, soil erosion, water consumption and water pollution. Food retailing plays a central role in the food system, as it can significantly influence both food production and consumption. The aim of the two consecutive research projects presented here is to assess the extent to which Germany's eight main food retailers, defined as those with the highest turnover, are using their range of influence to instigate action targeted at making the food system more environmentally friendly.
Method: We evaluated these companies according to an evaluation grid with, by now, 23 areas of activity, 90 indicators and 104 sub-indicators. The available action points with regard to the food retailers’ contribution to sustainable development are divided into the three areas: supply chain, own locations, and consumption. The focus of the research is on each company’s own-brand food product range. Unlike the first study, the second one also includes the aspects of social sustainability and animal welfare. The assessment used data from 2020 and 2023. The data collection phase utilized publicly available information and internal company information obtained by means of a questionnaire.
Results: The study with data from 2020 showed that all eight food retailers examined make insufficient use of their scope for action in the areas of supply chain, own locations and consumption. Although individual companies demonstrate notable performances in various areas of activity, these are not sufficient to make an overall significant contribution to the necessary transformation of the food system.
Therefore, we recommended in 2022, when the first study was published, that the companies implement their sustainability management in a considerably more systematic, and consequently, more effective way. This includes setting consistently verifiable targets for environmental sustainability, investing in better data capabilities, and linking sustainability management more closely with the business, purchasing and category management. The data from 2023 is currently being evaluated and results will be available by January 2025. Given the overall mediocre performance of the companies so far, we conclude that the current policy framework needs to be changed to enable food retailers to improve their environmental performance without suffering significant competitive disadvantages.
Further, the research was observed by and discussed intensely with the assessed retail companies, which means that the approach is taken seriously and has an impact on these important market players.
Significance to mainstreaming sustainable consumption: The food retail sector plays a key role in the food system. On the one hand, it influences what consumers can buy in supermarkets through its range of products. On the other hand, it determines the production methods of raw materials and products on the production and manufacturing side with its purchasing decisions. This study shows that the food retail sector in Germany can be considered a gatekeeper. Hence, the food retail sector has an elevated responsibility to actively shape the transformation of food systems in close cooperation with the other actors within the system.