When Iceland announced it will be plastic-free on own brand products by 2023, it was a watershed moment for the UK retail industry.
As the first major retailer in the world to make this commitment, Iceland is setting the standard for waste reduction. Recognising the importance of Corporate and Social Responsibility (CSR), Iceland is leading the way in waste reduction, a huge global issue which is firmly on the national and international agenda. And for me, it is a move that makes perfect sense.
Consumer trust has taken a few hits in recent years, with various major scandals such as horsemeat and allegations of irregular accounting. Even Tesco’s recent decision to restructure its Clubcard rewards was greeted with anger, forcing the UK’s biggest supermarket chain to delay the move.
Edelman’s Trust Barometer 2017 shows just 33% of people have trust in UK businesses, down from 50% in 2016. Crucially, it highlights that businesses will lose further trust unless they ‘engage with the people, and demonstrate solutions to public concerns’.
And that is exactly why Iceland has made its move. CSR has become a tool to help win back trust and drive competitive advantage, particularly around sensitive issues like plastic waste.
We’ve seen it in recent years with Morrisons’ Milk for Farmers initiative and National Living Wage commitments from the likes of Aldi, Lidl and Morrisons. Now, with global pressure growing to reduce plastic waste and the Prime Minister’s vow to eliminate all avoidable plastic waste in the UK by 2042, it’s time for further action from big retailers.
Some retailers are already making progress, as HuffPost UK expertly summarised earlier this month. Some more than others, it has to be said, but progress none-the-less.
Rise of the value and discount stores
For some, the most interesting part of Iceland’s pioneering move is that it comes from a value chain. In recent years, the growth of Aldi and Lidl in particular has had a huge impact on the grocery sector, taking market share from the big four and literally changing the way people shop.
At first, discount and value stores were competing on price alone. As their market share began to grow, so too did their investment in other competitive drivers like deliveries, choice and availability. Now, it seems they are adding pressure through CSR too.
Many said the rise of discount and value food retailers was a cyclical trend, but years later those same people are still waiting for that trend to finish. And if they continue to lead the market with innovative policies such as this, there is no reason why that trend will not continue.
Of course, we must not lose sight of the fact that the main objective is to rid the country and the seas of plastic pollution. Iceland aims to show the world that plastic-free is possible without impacting margins, in a move which will set a blueprint for retail as we strive towards Theresa May’s target. When others follow, the biggest winner will be the environment.