Perspectives on Business and Management

Nowadays, big supermarkets control almost all food retailing market in the UK. The majority of people find it much easier to buy all things they need in one place and, as a result, they buy all food in local supermarkets. However, it is noticed that because the largest UK’s food retailers have taken almost all the market, it is getting harder and harder for people to control the quality of food they eat, even if this food badly affects them. That is why there exists an opinion that supermarkets should be forced to promote more healthy food in their stores. However, the problem is that the promotion of healthy food can have a negative impact on supermarkets themselves. This report will discuss should supermarkets promote healthy eating in their stores or not.

There are several reasons why UK’s food retailers should be encouraged to promote healthy food in their stores. One of these factors is the increase in peoples’ obesity. ‘The prevalence of obesity in England has more than doubled in the last twenty five years. Although this recent increase in the prevalence of obesity has been seen in virtually every country in the world, the rate of increase in England has been particularly high’ (National Obesity Observatory Website, 2010) Undoubtedly, it can be clearly seen that obesity in the UK increasing in alarm levels. One of the factors that could help people to be more fit is food which is being sold in supermarkets. ‘The concentration and the power the leading food retailers certainly suggest that they are best placed to influence food buying behaviour and encourage healthy eating.’ (Jones, Comfort and Hillier, 2006) It can be claimed that if supermarkets would promote generally healthy food, people had not had another option besides of eating more healthily. Moreover, supermarkets should promote healthy food as a part of their Corporate Social Responsibility in order to help people be more healthy and fit. ‘This paper suggests that there is also variation in the extent to which information about healthy eating is available in stores and that the top ten food retailers could do much more to address these issues and thus to fulfil what Government clearly sees as their corporate social responsibility’ (Jones, Comfort and Hillier, 2006) So, government strongly motivates supermarkets to promote healthy eating as part of their CSR. It can be clearly seen that obesity level in the UK is growing very fast and, as part of their CSR, supermarkets should actively promote healthy food in their stores to reduce this level significantly.

 

The second reason why UK’s food retailers should promote healthy eating within their stores is that it will help the population to become healthier. According to the article on “Healthy eating and UK’s major food retailers” by Peter Jones, Daphne Comfort and David Hillier, UK’s largest supermarkets should have healthy eating agenda as part of their CSR (Corporate Social Responsibility). The article states that there is an increasing number of health related issues costing at least 2 million pounds of the public expense. This explains why UK’s top ten retailers should promote healthy eating. The article provides specific figures of the amount of sales, 65.3% of which are occupied by UK’s top food retailers. These are the sale numbers of only four of top ten UK’s food retailers. This suggests that UK’s largest supermarkets have a great responsibility of promoting healthy food in their stores because lots of people buy their daily food from these stores. This will result in less health issues and saving public expenditure spent on this annually.

Another reason why UK’s food retails should promote healthy eating within their stores is the improvement of their reputation. When UK’s supermarkets identified that the consumers are changing their attitudes towards healthy eating, because of the campaigns such as “Choosing a better diet” and “Choosing Health”, which were organized by the Department of Health, food retailers started to think how the healthy food promotion can affect their reputation. They understood that the addressing of healthy eating with positivity will only increase their success in the long term. The top ten retailers in the UK are using various methods to highlight their activeness with delivering this change. In stores the awareness of healthy eating is specifically highlighted by the top ten UK retailers (Tesco, Marks and Spencer, Co Op & Sainsbury’s) via the use of banners and leaflets, their own healthy eating range etc. Their online Corporate Social Responsibility reports also reflect their commitment towards healthy eating, and although these reports are aimed to stakeholders more than to the general public, retailers are using all possible ways to demonstrate their commitment to healthy food. Furthermore, since 2004 the Government has recognised the growing trends in peoples’ health problems and, as a result, growing costs to the NHS. This has not only brought pressure onto retailers to provide products which are healthier but also opened a path for them to be distinguished amongst other retailers. “Retailing is a very visible form of economic activity which exerts a major influence over the lives of consumers” (McGoldrick, 2002). As a result, UK’s government strongly encourage food retailers to promote healthy eating in their stores because both sides will benefit from it. The population will become one step closer to the healthy lifestyle and the supermarkets will significantly improve their reputations and, consequently, will make larger profits.

However, there are some significant reasons that can prevent supermarkets from the increasing number of healthy food in their stores. One of these reasons is that ‘Organic products typically cost 20% to 100% more than their conventionally produced equivalents’ (Andreyeva, 2012) This can lead to a risk for supermarkets of making a loss as the prices will be high and customers will prefer cheap products which can be relatively less healthy. There are four main reasons why organic products cost more than conventional products. The first reason is ‘there are no more use of chemicals and synthetic pesticides, as a result, the demand for labour increases thus more money will be needed to pay for labour force’ (Spevack, 2011). The second reason is that producing organic products takes longer time because conventional manufacturers are able to reduce costs when producing a product in larger quantities while organic farming cannot. The third reason for the high price is that not only organic farms are typically smaller than conventional ones, but the process of cultivation in these farms is taking more time. What is more, since there are higher standards for animal welfare for organic farming, the cost for feeding live stocks is higher than normal, for example, ‘organic feed for cattle and other livestock can cost twice as much as conventional feed’ (Spevack, 2011). All these facts result in higher price of organic food, thus supermarkets have to spend more on purchasing those products from farmers. This will directly lead to an increase in prices that appear in supermarkets because they have to pass the extra cost onto consumers. However, because of world’s economic problems there are not many people who are willing to pay for those expensive products and, as a result, the supermarkets may get less profit than ever.

Moreover, recently supermarkets tend to supply more healthy eating as a result of market demand , however supermarkets might feel less attractive to promote healthy eating because three main reasons. Firstly, although people start understanding more about the importance of healthy eating, the truth is healthy eating does not affect much on customer spending behavior. It could integrate that because consumers have had familiar with traditional way of dining for a long time which suits their taste and they are much cheaper. For example, in 2009, the average spending on fruit and vegetable was only 17.5 percent compared with close to 40 percent on high energy products, such as meat, fish and sweet & sugar products. Secondly, the cost to produce healthy foods such as functional foods or supplement foods is very high. Hence, the price will also be higher compare to traditional foods. This will lower the competitiveness of this type of product since it aims at niche market only. According to Heart Foundation, in order to product 1000kcal of low energy food require 18.6 dollar whereas higher energy food only needs 1.76 dollars/1000kcal. This means approximately 18 times more expensive. Finally, price of healthy products is also much more sensitive to inflation than others. It can be a huge concern of consumers under recession period. They will be likely to turn their back on healthy foods since the price is a lot higher than traditional ones. The report of Heart Foundation pointed out that from 2007 to 2009, the price of lower energy food rose by 20% compared with only 1,8% in higher energy product. According to Solid Association, the sales of organic products in Sainsbury and Tesco fell by 5 and 5.9 percent respectively from 2010 to 2011.

To sum up, it can be clearly seen that there are more reasons for supermarkets to promote healthy eating even though their profit can reduce. The main benefit of promoting healthy eating for UK’s food retailers is that it will improve their reputation significantly and will help to perform well in their CSR agendas. Furthermore, it will help the population to become healthier and will reduce the level of obesity in the UK. That is why it is enormously important for the government to encourage UK’s food retailers to promote healthy eating in their stores.

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