Supermarkets faced blistering accusations of profiteering during the cost of living crisis, and now shoppers are questioning whether retailers are helping them to live more sustainably or unfairly hiking the prices of green products

Brits are adamant supermarkets are putting profits before sustainability, believing they as consumers are forced to bear the financial brunt of living a greener lifestyle.

Three-quarters of those asked in a Ipsos poll claim it costs them more money to make sustainable product choices, with less than a quarter (24%) believing supermarkets help them to make more sustainable purchases, while 61% don’t understand why sustainable options tend to cost more.

The cost of living also continues to bite shoppers’ budgets, as 58% are making fewer sustainable choices, the same Ipsos data reveals. Kantar’s most recent Sustainability Sector Index shows 97% of 33,000 people interviewed want to lead a greener lifestyle, but 68% believe environmentally-friendly products are more expensive than standard ones.

There is a clear belief among shoppers that higher prices – driven by retailers and brands – are preventing them from doing the right thing. These accusations, however, aren’t wholly reflective of the truth. In some cases, it could be a simple lack of visibility and communication that is leading to a misconception among consumers.

Environment, social and governance (ESG) initiatives are multifaceted and cover a swathe of areas seen and unseen by the public, like more efficient lighting, solar panels or sourcing from renewable and fair suppliers. Focusing on the environment, Cadbury, for example, has increased renewable energy usage from 32% to 39% in the year to 31 December 2022 and reduced CO2 output by 39 tonnes. This all has hidden and sometimes vast costs that can take decades to recoup.

But if consumers do feel cheated, what are supermarkets and brands doing about it and who should shoulder the cost?

Across the economy, inflation has caused shoppers to rethink their purchases. Choosing whether to buy environmentally-friendly products is no different, believes KPMG head of consumer markets, retail and leisure Linda Ellett. “The need to find value when shopping has risen,” she says. “Our consumer research shows this has impacted sustainable and environmentally-focused purchasing.”

Despite this, a product’s environmental impact remains one of the top five drivers for shoppers when considering goods and services, Ellett adds. It’s so important that “over half of consumers say they would stop buying from a company if it was found to have been misleading in its sustainability claims”.

Consumers are making environmentally-friendly decisions when the opportunity is right, affordable or easy. Some 85% recycle as much as possible; 84% use reusable shopping bags; half consume products past their best before date; and 40% are buying local produce [Ipsos September 2023].

Around a third (36%) are also producing less waste to help the planet and save money, a BBC Good Food Nation report shows. However, more Brits reduce waste to save money (59%), compared to 34% who are doing so to live more sustainably.

Supermarkets have vast sustainability plans

Yet, value and sustainability are becoming increasingly associated with one another, continues Ellett. “This combination of factors is something supermarkets can build upon, with initiatives focused on reducing food waste, packaging reduction and recycling partnerships,” she says. “These are areas where supermarkets could demonstrate a commitment to sustainability and value to consumers in the coming years.”

The major retailers have in place ESG plans; usually hefty, publicly available documents pledging all kinds of action to be delivered in the short and long term. Waitrose’s includes responsible sourcing, among other elements, and the retailer believes its customers value its planet-saving initiatives. “We have a great track record when it comes to sustainability, so are fortunate to have earned people’s trust,” says John Lewis sustainability & ethics lead Simon Winch.

Tesco, Sainsbury’s, Iceland and Lidl were all approached for comment, but did not respond. Aldi provided data on its environment-related initiatives, and Morrisons did not provide a comment. 

But there’s a trust issue among most UK shoppers, who overall don’t believe retailers’ sustainability claims, according to Mintel’s 2023 Global Outlook on Sustainability: A Consumer Study.

“We have a great track record when it comes to sustainability, so are fortunate to have earned people’s trust”

A recent Which? ranking, however, placed Waitrose joint first with Lidl for sustainability, backing the former’s claims. Both supermarkets achieved an overall score of 74%, but Lidl secured a maximum rating for greenhouse gas emissions, whereas Waitrose had more impressive marks against plastic and food waste.

A year-round Waitrose marketing plan is claimed to maintain customer awareness, highlighting the grocer’s initiatives on things like switching single-serve glass wine bottles to cans – saving over 300 tonnes – and the launch of a trial “removing the plastic sleeve around the bottle neck and cork”, adds Winch.

The reduced impact of packaging on the environment is a concern for consumers. Over half (53%) claim they seek sustainable packaging from brands, with 61% saying sustainability overall is more important to them now than two years ago [NIQ 2023 Sustainability Report].

What claims are most important to consumers [NIQ 2023 Sustainability Report]:

 RankInitiative  %
 1  Sustainable packaging  53 
 2  Responsible sourcing 46 
 3  Cruelty-free 43 
 4  Reduced/zero waste 41 
 5  Produced using renewables =39 
 6  Ethically sourced =39 
 7  Locally sourced =38 
 8  Better for the planet =38 
 9  Protection of natural resources  37
10  Kinder to environment 35

Perhaps unsurprisingly, consumers believe the burden of behaving more sustainably lays less with individuals (38%) and mostly with large businesses, such as supermarkets and brands (57%), and even more so with the government (68%), through the likes of targets and legislation [Ipsos September 2023].

Brits are less certain on whether supermarkets are doing enough to help reduce the UK’s carbon footprint, with 44% believing the major multiples are either doing a great deal or a fair amount. Just 2% more (46%) believe supermarkets are doing not very much or nothing at all, while 10% don’t know, Ipsos data shows.

Again, opinion is divided on how satisfied they are with the supermarkets’ work to help reduce the UK’s carbon footprint – 43% are satisfied versus 43% who are not [Ipsos September 2023].

Yet, consumers are decisive when it comes down to cost and who or what prevents them from being greener. Three quarters argue it’s pricier to make more sustainable product choices, and 46% say they would consider avoiding a supermarket if sustainable products weren’t made more affordable [Ipsos September 2023]. The same Ipsos data shows under a quarter (24%) believe supermarkets help them to make more sustainable choices, with 40% on the fence.

Who should bear more of the cost burden is clear among consumers – it’s for the brands and retailers to make it more affordable. Equally, retailers and brands are firm on where responsibility lies. “Everyone has a role to play in driving sustainability forward,” Waitrose’s Winch urges. “We’re doing everything to prevent passing costs on to consumers. At the same time, though, we’ve long been clear that sustainable retail isn’t a race to the bottom as someone will always pay the price.”

Consumers ‘will pay more’ for greener products

Every supermarket would argue they are committed to offering their shoppers variety and value, even on products with an eco-focus. Price, however, continues to be and perhaps always will remain a key part of a consumer’s decision-making process.

So, who shoulders the additional cost associated with many sustainable alternatives is important if retailers and brands want to continue responding to shoppers’ desires to live – at no significant burden to themselves – a greener lifestyle.

Oat milk producer and supplier Oato founder Carl Hopwood, however, claims consumers are willing to pay a green premium as they are highly informed and value transparency. “They [consumers] research brands and seek insight into their practices,” he says. “Strong ESG credentials signal a commitment to ethical and sustainable practices, which resonates with informed consumers.”

This is backed by Premier Foods’ ESG director Nick Brown, who believes there is a growing number of people prepared to pay more for genuine green innovation. “They’re an important group because increased demand means [innovations] can be adopted at scale and become more affordable in the future,” he says.

But Hopwood concedes marketing around why something costs more is vital to getting the consumer to buy into it. This as an issue, as just under two-thirds of consumers are unsure why sustainable products tend to cost them more, Ipsos data shows.

“It’s essential to acknowledge that a substantial portion of shoppers face budget constraints and seek eco-friendly options at more accessible price points”

A start to countering this could be the inclusion of known logos associated with sustainability, such as “the Red Tractor and widely adopted on-pack recycling scheme”, advises Brown.

Stronger information about greener brands could even curb a fall in the number of some supermarket listings, particularly in eco-marketed household products, which saw a 9.7% drop in the year to 19 September from 381 to 344, The Grocer analysis of Assosia data shows.

While the eco-marketed household products category is small, greener cleaning is gaining mainstream traction, with the likes of Greenpeace utilising social channels such as TikTok to highlight the potentially harmful nature of some standard household cleaning products.

It’s also an area of opportunity for upcoming – and existing – brands to launch into. Ecoegg gained six new listings in Asda in March, and in July accessed Morrisons with its Fresh Linen Laundry Egg and Laundry Egg Refill Pack.

But the brand is conscious of and is responding to shoppers’ focus on value. “It’s essential to acknowledge that a substantial portion of shoppers face budget constraints and seek eco-friendly options at more accessible price points,” says Simon Orchard, general manager at Ecoegg.

Sustainable household cleaning products

The eco brand has introduced a range that Orchard claims is more competitively costed, including lower priced small pack sizes, and starter kits with 50 washes.

Price can’t wholly be blamed for a delisting dip, as eco-marketed household products have not increased prices more than grocery generally, rising by an average of 12.7% when compared like for like to the previous year – though still below the 13.6% rate of grocery inflation for the year to August 2023. The scale of eco-marketed cleaning products also means supermarket range reviews will have a bigger percentage impact when products are delisted, compared to larger segments.

Sustainability, however, extends beyond the product a brand puts onto the shelf and even its price. Shoppers are increasingly interested in the actions of the business behind a name and the retailer stocking it. “The challenges we’re tackling aren’t unique to any one [supplier] business and no single company will solve them alone,” says Brown.

KPMG’s Ellett believes this is an opportunity for supermarkets to position themselves as “sustainability leaders” within the wider economy and can “have a big influence on the consumption behaviours of customers across the country”.

But that’s not without its challenges. Supermarkets have complex supply chains from production to transport and often thousands of suppliers, who must also be influenced to ensure products meet varying needs.

Although Rachel Orton, UK ESG lead for consumer and retail at KPMG, says: “Supermarkets have the ability to influence what they choose and sell, but they have a greater chance of achieving success and growth if they incorporate sustainable products across multiple lines and multiple ESG-related claims.”

For example, IGD’s Sustainability Trends 2023 report highlights fmcg can lead in five key areas: reducing food waste, energy reduction, packaging efficiency, responsible sourcing and community-conscious retail. Progress from all of which can easily be communicated directly to shoppers.

And shoppers aren’t asking supermarkets or brands for groundbreaking innovations. Over two-thirds (69%) want retailers to reduce single-use plastic across their businesses. A further 52% want to see sustainable transport, such as greener delivery vehicles and opening stores in areas accessible by public transport.

Most also have hangups over food waste, with 72% wanting to see action from supermarkets on bolstering sales of misshapen produce, as well as stronger initiatives to share unsold food with communities in need [Ipsos September 2023], such as with The Grocer’s pioneering Waste Not Want Not campaign.

While the cost of living crisis may have initially diverted consumer budgets and attentions away from sustainability, they are shifting spend back towards ESG-related products, adds Orton, who advises supermarkets should avoid favouring financial growth over sustainability within corporate strategies.

Increasingly, shoppers will be swayed by a business’s sustainability credentials. However, there is an expectation that both brands and retailers share the burden of added costs more fairly, rather than passing them onto consumers. But as experts rightly state, more green-focused innovation across categories will inevitably bring prices down, but any increased costs must be justified to the shopper.

 Additional Assosia data analysis and reporting by Lilith Foster-Collins.