The Retailer Autumn Edition 2022

SUSTAINABILITY MUST REMAIN AT THE HEART OF RETAIL

Helen Dickinson OBE Chief Executive British Retail Consortium

The UK is in the grips of a cost-of-living crisis, driven by high inflation and soaring energy prices; a result of both the pandemic and the ongoing war in Ukraine. UK inflation hovers around 10%, a 40-year high, with some experts suggesting it could go far higher the coming year. And it is not just economic turbulence that is rocking the UK, but political too, Britain has its fourth Prime Minister in just four years – as well as the death of Her Majesty the Queen. Consumer confidence has fallen to a level below the 2008 financial crash and the worst effects of the energy crisis still to come as the nights get colder. It is unsurprising that this turbulence is now being felt right across the UK retail industry – its three million employees and the £400bn in spending it generates each year. Despite the intervention on energy prices, pressure on households continues to build. While the government has capped the energy rise at 27%, with protections from further rises for two years, this still represents a doubling of energy bills since October 2021. Meanwhile, mortgage rates have been steadily rising and food prices continue to increase. Sadly, this will mean too many households being forced to make the devastating choice between ‘heating or eating’ this winter. As a result, retailers are likely to see consumer demand struggling to keep up as we approach the Christmas period. At the same time, businesses face rising costs throughout their supply chains. This includes their own rising energy bills (mitigated somewhat by the six-month cap), higher commodity prices and increased transport costs, in addition to a tight labour market. Understandably many retailers are looking for more ways to cut operational costs, as they work hard to protect consumers from the worst of these cost-pressures. Many operations are being stripped back to the bare essentials in a bid to remain competitive. But there is one area that retailers must not be tempted to cut – sustainability. Putting sustainability at the heart of business operations is not a marketing ploy. It is not virtue signalling. It is not a nice-to-have. It is a vital part of the solution for firms. From reducing pack aging to green fleets, and from solar panels to cutting food waste – we are seeing essential actions that will not only help the country tackle climate change but will help to reduce energy use and cut future costs. The BRC recently ran its own Climate Action Week, celebrating the amazing work already being done by retailers to tackle climate change. The week provided an amazing opportunity to share some of the best practice needed to move the industry to Net Zero by 2040 – our target under the Climate Action Roadmap. It included webinars on cutting emissions and saving energy; reports on moving consumers to more sustainable choices; and the inaugural Climate Action Roadmap Showcase. The Showcase celebrated the achievements of retailers in reducing their carbon emissions and improving sustainability. Our judges, including experts from WWF and WRAP, selected some amazing case studies from across our retailers to highlight at the awards. Yet even these are just a drop in the ocean of what is needed if we are to play our part in lim iting global temperature rise to 1.5°C above pre-industrial levels. In 2017, the full lifecycle of the sector’s sold goods had a footprint of around 215 million tonnes of CO2-equivalent – over 30% of all household greenhouse gas emissions. Both the responsibility on the industry, and our opportunity to make a difference are enormous. So, while retail faces an enormous challenge in the form of the current economic and geopolitical landscape, we must not miss the wood for the trees. The cost of living crisis will be here to stay for months to come, but the climate crisis could be here forever unless we act now.

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The UK is in the grips of a cost-of living crisis, driven by high inflation and soaring energy prices; a result of both the pandemic and the ongoing war in Ukraine.”