Since its very onset, over a century ago, the supermarket model has had only one purpose: to make us buy as much as possible. But nowadays, a more responsible approach to consumption is gaining traction, one that is more aware of environmental sustainability. Mass-market retailers are dealing with new consumers. Will they be able to self-renew accordingly?
The supermarket is a whole world and a metaphor for the world. It is an expression of a certain economic order and the core of global flows of goods and matter. It is also a social paradigm and a reflection of habits, attitudes, unrest and expectations of a specific time. As Marc Augè famously put it, it may well be a nonplace, but the “non” exudes a host of meanings.
We all realised it, even the most inattentive; when the pandemic set before us all the images of endless queues at the entrance of supermarkets during lockdown. A dejà vu of difficult times and a taste of future dystopia that somehow awakened us and marked a major breakthrough: the end of the perception of wealth. The appeals of environmentalists, the threats of climate and ethical warnings did almost nothing compared to the shortage of pasta packages and toilet paper supplies in reshaping a more responsible consumer approach.
Today, mass-market retailers are faced with a new consumer. Will they be able to self-renew accordingly?
Sustainability and retailing: a contradiction in terms?
In Calvino’s Marcovaldo, the protagonist meanders crazily through the aisles of a hypermarket, with a trolley overflowing with all kinds of food he can’t afford: those were the booming and hopeful 60s. Pennac’s hellish Department Store on Christmas Eve, brimming with screaming children and cotton wool Fathers Christmas: welcome to the 80s, with their advertising spree and compulsive consumerism.
If literature were to provide an insight (assuming it hasn’t already done so) into the image of a consumer living in the 20s of the 21st Century, it would probably be that of a puzzled inspector of nutritional labels and sustainability certifications, roaming around the aisles of a supermarket trying to compromise between his, more or less heart-felt, environmental concern and the compelling urge to fill up his shopping trolley.
According to market surveys, sustainability has now become quite popular. On the front page of the report Global Powers of Retailing 2022 drawn up by the advisory giant Deloitte, after analysing the world’s largest 250 retailers, a stark figure stands out: 55% of consumers declared to have purchased at least one “sustainable” product or service over the previous four weeks. They aren’t random purchases but responsible choices, since 32% of them claim to be prepared to pay more for them and 19% is willing to wait longer to have their green product.
For Europeans in particular, the issue is even more urgent: according to the European Grocery Report 2022 by Salesforce, although most interviewees claim to be loyal to their retailers (69%), 78% would change stores if they didn’t satisfy their idea of sustainability.
So, after “affordability” and “quality”, “sustainability” is the new buzzword for mass-market retailers’ marketing campaigns. The issue is how to calibrate them.
Like any other current economic sector, the retailing one is not immune to reshaping its production and organisation processes in a green way: from its supply chain to energy savings, from efficiency of buildings to waste collection systems and management, up to staff training and perhaps initiatives of environmental education for customers. The difficult part will appear when sustainable transformation clashes with what is the main goal and the very reason for the existence of supermarkets as we know them: to make us buy as much as possible.
When the first supermarket in history – Piggly Wiggly – was inaugurated in Memphis, Tennessee in 1916, the revolutionary breakthrough it boasted was self-service: customers were free to grab anything they liked from shelves, without the help of any assistant. That was the start of unbridled consumerism. That premise set the tone for a variety of discounts, flyers, 3X2, special offers, loyalty points, as well as strategic displays of products and departments, with which large or small supermarkets have been competing to continually generate new consumer needs for those walking through their sliding doors for almost a century.
Nowadays, though, “responsible consumption” is the new mantra. Trying to find a compromise between the two components is quite a challenge.
Designing the supermarkets of the future
“Nowadays, the retailing sector can no longer afford to ignore sustainability, especially if it aims at new generations.” Paola Armenia, responsible for the marketing department of CEAN, a retail design business, talked to us sitting in the midst of refrigerator aisles, fruit and vegetable showcases and illustrated posters. That’s not a supermarket but rather a workshop: here, in an area of 6,000 square metres on the outskirts of Turin is where future retailers experiment and fulfill their dreams. The business – founded by Francesco Dragotto 40 years ago – is a meeting point between retailers and consumer needs, turning ideas into projects ranging from small local shops up to large Chinese hypermarkets.
“The first and most important step is listening to customers’ needs,” explains Armenia to Renewable Matter. “Then we move onto the analysis, where consumer needs come into play: we rely on market surveys, but we also try to understand the kind of clientele around the store specific area.” Once a clear picture is obtained, they can start planning. “The first phase of designing – she continues – is about research of spaces, architecture and plants against a framework of sustainability and energy saving. For instance, lighting is a very important aspect both for business and savings. Light is a key element to enhancing the product and walking into a properly lit store increases the perception of wellbeing. As for sustainability, we boast cutting-edge lighting equipped with smart systems, rationing consumption according to different times of the day and tap as much as possible into natural light.”
Luckily, energy management and efficiency, as Paola Armenia reiterates, are now acquired knowledge most retailers put into practice with no formal communication. German behemoth Lidl answered Renewable Matter’s call. Its Italian representative for communication, Alessia Bonifazi, proudly rattles off the results with regard to energy transition obtained by Lidl Italia: “40% of our buildings are already equipped with their own PV system and most stores offer ever-larger installations, able to meet up to 50% of the overall building’s energy needs.” On a smaller but still promising scale is the experience of the Austrian chain (popular also in Northern Italy) Mpreis that, as Natalie Seidel, in charge of public relations, explains, established the first “passive” supermarket in Central Europe and was awarded two prestigious prizes as one of Austria’s leading producers of solar energy.
However, there are cases where energy efficiency practices clash with deep-rooted convictions on marketing strategies. It is not rare, for instance, to bump into open refrigerator aisles: a useless energy loss that could simply be eliminated with a door, which many retailers, though, see as a “barrier” to purchasers. “Today, though, we are faced with extremely evolved consumers able to recognise signs sensitive to sustainability and above all those truly implementing them,” comments Paola Armenia. A textbook example of such new awareness comes from the vast array of Cean’s experiences. “A few years back – Armenia says – we suggested a client should display at the entrance of his stores the following message: ‘Buy less, buy every day, buy only what you need.’ He listened to us. Back then, in 2014, promoting the concept of mindful shopping was quite a breakthrough and his was a brave choice. We carried on with further communications along the same lines. For instance: ‘We are sorry if at the end of the day our shelves will not be fully stocked. Don’t be upset, we do it because we purchase the bare minimum to get us through the day to avoid waste.’ Customers appreciated that. Such approach showed that we care, customers feel that in their supermarket of choice they are not palmed off everything and more. If it did work back then, all the more reason for it to work today, since the concept of waste reduction, luckily, is currently so widespread.”
Plastic and packaging
Packaging plays a pivotal role in marketing strategies and the organisation of a supermarket. And when we mention packaging today, we mean plastic. Planning future retailing with a view to sustainability inevitably means coming to terms with the issue of plastic.
According to the report Under Wraps?, published in May 2022 by Changing Markets Foundation and the coalition Break Free From Plastic, European supermarkets don’t really practice what they preach. 82% of interviewees – as shown in the paper – did not want to disclose basic information on their plastic footprint and in general, beyond little transparency, the investigation also revealed little practical commitment to reducing plastic packaging, despite widespread proclamations. For instance, as for the implementation of DRS schemes (Deposit Return Schemes), out of 74 contacted retailers, only 5 (Aldi Ireland, Aldi Denmark, Aldi UK, Lidl UK and BioCoop France) declared to fully support the introduction of deposit return schemes for the collection of empty beverage containers in their stores. “Our investigations – as the report authors write – revealed retailers feature amongst the main opponents to DRS implementation.”
There are those, though – drawing on their wealth of experience in the field spanning over fifty years – who are less pessimistic. “Of course, the retailing world is going through a Copernican Revolution and naturally there has been some uncertainties, but the sector is now starting to fully back up the process,” comments Filippo Montalbetti, vicepresident of the Office for governmental relations in Central Europe for multinational Tomra. To date, it boasts 80,000 reverse vending machines scattered in 40 countries throughout the world. “Trade associations such as those of Scottish and Lithuanian retailing sector – continues Montalbetti – publically declare to be fully satisfied with the onset of DRS. However, in Austria, where over the last twenty years distribution was all against such a system, now, in the space of a few months, there has been a U-turn in their attitude and the retailing sector has become one of the main supporters of DRS.”
Such change in their approach is key so that a real benefit from food container collection to be recycled can be felt. Supermarkets and the whole distribution sector play a pivotal role since, amongst the totality of applicable DRS models, the return-to-retail is by far the most effective. “In Europe, with the exception of Iceland alone, all countries featuring by law a deposit system adopted the return-to-retail and all of them carry out collection rates of over 90%,” Montalbetti explains. “Where there are mixed systems, instead, with collections carried out through stores with municipal recycling centres, such as in the States, Canada and Australia, collection rates are far lower, sometimes even below 50%. Indeed, for citizens it is considerably less convenient to drive to the nearest recycling centre compared to just having to remember to take empty bottles to supermarkets where they shop every week.”
Then, there is another aspect to consider. “Retailing, today, wears two hats: that of retailer, but as is often the case that of producer too,” explains Montalbetti. “Nowadays, large chains produce their own white-label products and in their capacity as producers, they have to meet the collection targets for packaging as mandated by the European Union. All in all, DRS makes economic sense to them.”
Lidl, in this regard, was a forerunner. Already before the adoption of the SUP (Single Use Plastic) Directive it had introduced its own peculiar system of collection and recycling of PET bottles. The systems stemmed from the German DRS that, unlike other European models, states that the collected material should remain the property of distributors. Lidl, that also produces its own bottles, – mainly mineral water, collects and recycles them in house, thus coming full circle. “With our system – points out Lidl International Press Office to Renewable Matter – PET bottles are 100% made out of used bottles.”
But DRS is just one part of Schwarz Group’s plastic reduction strategy, the German multinational to which Lidl belongs. “At group level – the Press Office continues – we have adopted a plastics strategy REset Plastic. This holistic international approach covers five areas of action: from avoidance and design, through recycling and disposal, to innovation and education. In this way, the vision of ‘Less plastic-closed loops’ will become a reality.”
From nonplace to anthropological place: supermarkets as a point of reference for communities
If a true sustainability of supermarkets is possible, it is now quite clear that it has to go through co-operation, or better still an alliance between retailers and consumers. In a nutshell, a community should be created where your store of choice becomes a point of reference. The time of hypermarkets-showcases swallowing customers, dumfounding them with Muzak, flooding them with coupons and deals, filling them up with merchandise like foie gras geese. Today, as stated by Franco Fassio – professor of Systemic Food Design at the University of Gastronomic Sciences in Pollenzo, “Stores should communicate the culture of circularity and sustainability. But the aesthetic dynamic still underpinning mass-market retailers necessarily generates waste. The retailing sector, from a nonplace, should then move towards the direction of an anthropological place, a locally deep-rooted location. Such transformation is only possible through communication and dialogue.”
Dialogue and local deep-rootedness are, therefore, a key aspect in the history of Mpreis, the Austrian chain founded a century ago by Therese Mölk who while addressing Tyrolese housewives, promised good quality and cheap prices. “Essentially – Natalie Siedel claims – we keep on doing the same thing while keeping close contact with local producers and consumers. We are a regional family business, we cooperate with other businesses, with the farming community, local institutions and even schools in many ways. We understand local culture and know what our customers want. We help even tiny producers to sell their products in our supermarkets. This is what clearly distinguishes us from the huge international supermarket chains.”
While planning new stores of various Italian and international chains, Cean, too, often adopts a “social” approach. “We recommend the introduction of services for the community because we are convinced that a store also has a social function,” explains Paola Armenia. “During Covid we’ve devised ‘Supportive Shopping,’ a gift card to support people in need. We often recommend the introduction of containers to collect exhausted batteries and expired drugs.” Free on-tap water dispensers are another case in point, a very useful service although quite difficult to implement, mainly because it clashes with the interest of bottled water producers.
“Even designing green spaces and indoor vegetable gardens is an element that can strengthen a sense of community and wellbeing,” adds Armenia. It can also become a vehicle for environmental education and school teaching, such as the bee garden landscaped in a Mpreis store.
Last but not least, the issue of food waste reduction, a meeting point par excellence between distributor’s responsibility and consumer’s awareness; such aspect must inevitably be tackled at the local and community level. It is a vast subject requiring a number of strategies, ranging from more accurate estimates of the quantity of sold food (for instance through the use of digital technologies and artificial intelligence) to new marketing models (such as discounts on products approaching their sell-by date) including unsold food redistribution systems through agreements with NGOs and associations or the use of dedicated apps. One of them is TooGoodToGo, the app allowing users to buy expiring products at very cheap prices. Launched in 2016, the B-corp is now working with a network of 6,900 supermarkets in 17 European countries and has allowed over this year to save from the landfill 52 million Magic Boxes with a full meal. While, as for unsold food unsuitable for human consumption, there is always the alternative animal feed or compost, as Lidl International tells us. Or else, with stale bread, excellent alcoholic beverages can be obtained, as Mpreis is currently doing, “Our innovative upcycling projects include – they explain – the distillery of our ‘Therese Mölk’ bakery, where we produce pure alcohol from unsold bread, then used to obtain premium spirits such as Herr Friedrich Tyrolean Gin.” So, it all comes full circle and everything stays in the community.
In stark contrast with the classic throwaway convenience culture and standardisation and globalisation of the retailing sector, circularity and proximity could thus reshape the future of supermarkets. A little courage is needed since, as Franco Fassio concludes, it is all about “replacing the values, acquired over the years, of productivity and profitability with the revolutionary ones of quality and wellbeing.”
Image: Ilja Freiberg (Unsplash)
Download and read the Renewable Matter issue #41 on Food Market.