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Tesco's Big Green Plans Labeled a Failure

February 1, 2012

Back in January 2007, the then CEO of Tesco, Sir Terry Leahy, pledged to develop a program that would place carbon labels on the more than 50,000 products the retailer sold.

In May 2008, Tesco said it was finally getting underway with its carbon labeling program. It would start by labeling 20 store brand items covering four categories (detergents, orange juice, potatoes and light bulbs).

Now comes word from the company that it has decided to end the program saying it was too complicated and costly.

According to a report by The Grocer, Tesco found that it took several months to determine the carbon footprint of a single product. The retailer also thought it would be joined by other retailers pursuing a greener path and that never happened.

"We expected that other retailers would move quickly to do it as well, giving it critical mass, but that hasn't happened," Helen Fleming, Tesco's climate change director, told The Grocer.

David Metcalfe, chief executive of Verdantix, told the Financial Times, "I wouldn't criticize Tesco for stopping this because no retailer anywhere in the world has found this a successful way of engaging consumers."

Tesco said it remains committed to the “ambitious and stretching” goal of reducing its carbon footprint to zero emissions by 2020, according to the Financial Times.

FINANCIALS:     [PINK:TSCDY]

Discussion Questions:

Discussion Questions: Will the end of Tesco's carbon labeling program damage its credibility on sustainability issues? Is there a future in carbon labeling for the retail industry? What do you think Tesco should do next?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How much of a hit will Tesco take to its 'green reputation' as a result of pulling the plug on its carbon label program?

Comments:

Ending the carbon labeling program shouldn't damage Tesco's reputation on sustainable issues. Tesco at least tried to make the complicated program work and the public knows it.

Tesco should just keep running top-notch retail food stores, which they do very well, and not sweat the carbon labeling program. In the future, there will be new sustainable issues and Tesco will likely give solid leadership to them.

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Gene Hoffman, President/CEO, Corporate Strategies International

Ending this limited program will have little impact on Tesco's credibility. Consumers are not clamoring for this data. Tesco and other retailers should continue to focus on sustainability, reducing packaging and recycling. Eventually it will become easier to calculate a product's carbon foot print, but will that matter more to consumers than saving money each time they shop?

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Max Goldberg, President, Max Goldberg & Associates

No, if anything I think this may be an example of "better to have loved (the environment), and lost than to have never loved at all."

In the long-run Tesco may be happy the program failed. Given the difficulty, (and potential variability) of establishing individual product carbon footprints, the company may be better off walking away having tried to do the right thing. The alternative would have been to hold up over 50,000 individual targets for environmentalists to shoot at.

I personally don't think there is a future for carbon labeling at the product level, but then again, I'm in the camp that says that most of what the food industry views as sustainability initiatives range from the outright duplicitous to the incredibly naive.

You can make all the marketing claims you want about your virtue, but that doesn't -- by itself -- actually make you virtuous.

As for Tesco, I salute their efforts and their common sense on this issue and I'd encourage them to continue exploring sustainability projects that share the same bold vision, but might be a tad easier to implement.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Another in Tesco's long line of bad decisions (to do this in the first place). The tiny minority who are interested in this issue will be disappointed, but it's not like they have other places to go for labeling. No damage to the company -- they shouldn't do anything except improve their customer service.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

There are good intentions here, but until the retailers require manufacturers to provide the data, it will continue to be too costly. Clearly the guy who makes and sells the product should be the one who knows what the carbon footprint should be.

But, if I knew, I certainly would not tell a customer unless I was the best in my category. And there can only be one best.

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Gene Detroyer, Professor, Independent

Nothing ever seems to go right with labeling programs, and recent supermarket history is littered with terminated or no-growth labeling attempts, either for nutrition or green issues as this one. If it can't be done on a voluntary basis, then labeling of all types will revert to the federal government as yet another regulation. I even doubt that backing away from this program will hurt Tesco; such is consumer apathy.

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Roy White, Editor-at-large, RetailWire

I give Tesco props for pulling the program rather than forcing it through, particularly as its share of the UK grocery market hits a seven-year low. Remember when Walmart announced that carbon footprint labeling of some kind would be the culmination of its phased sustainability initiative? Ms. Fleming would seem to be spot-on in her assessment that others haven't taken up the mantle as planned.

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Carol Spieckerman, President, newmarketbuilders

Some people shop at Tesco because they love it and believe it to be the best cheap supermarket there is.

Some people shop at Tesco because it is the only supermarket within striking distance of where they live (have you guys heard about Tescopoly?).

My feeling is that none of them will care two hoots about this.

Then there are the people (and yes, readers, there are many) who hate Tesco and will be delighted to see them admit defeat on something. Especially now when they are suffering in other ways as well. And not least because what they proposed to do was actually un-doable in anything but their own teeny little megalomaniacal brains.

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Bernice Hurst, Contributing Editor, RetailWire

It's easy to imagine how this happened. Some overly enthusiastic -- or overly influential -- board member came up with this idea and wouldn't shut up about it until everyone else humored him (or her); at least that's what I hope happened. The other alternative -- coupled with the F&E doubts -- is they don't know what they're doing. Are you only allowed three strikes in cricket, too?

'notcom'

Carbon labeling is a complex issue, one that does not easily translate to the everyday consumer. Tesco should take the steps to make the complex simple, should they choose to let consumers know what and why they are taking steps in this area. In the process, they will also need to offer the consumer Tesco's perceived value in making these moves, and how it benefits the consumer.

There is zero damage to Tesco's external credibility on sustainability issues. If necessary to help their own internal agenda maintain a focus on this area, be it promotional, cost-saving, or environmental belief (perhaps all of these), they should address it with associates and vendors. Those are the constituents that they invited into the party initially.

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Roger Saunders, Managing Director, Prosper Business Development

I don't believe this will negatively impact their credibility, however, it may temper their approach when setting goals the attainment of which is dependent upon yet undeveloped metrics and technology.

Tesco should still move forward on publishing progress towards their sustainability goals, and develop projects and goals which are attainable and can be reported upon. There are many available that can enable their benchmarking and reporting on greenhouse gas reductions.

Charles P. Walsh, President, OmniQuest Resources, Inc

The old expression "nothing ventured, nothing gained" is appropriate here. I commend them for the effort. Now let's move on and not bury them.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

In our research, we see a pattern of shifting emotions about the environment, and changing motivations to choose a green lifestyle, which would suggest that there is increasing opportunity for initiatives like Tesco's (though perhaps Tesco's specific tactical choice proved somewhat unwieldy). Specifically, our emotional data used to suggest that preference for green lifestyles as somewhat of a "superego" issue -- setting a good example, taking the lead, doing the "right thing." Of late, motivation to be green is both more widespread and more pragmatically rooted -- a large segment of people now believe it is necessary in order to prevent truly bad things from happening to the planet and we who live on it.

In this emotional context, as opposed to even five years ago, I think it's fair to project a broader audience for green initiatives of all stripes. However, I'm not certain if posting carbon footprints for products might be a little abstract for the average consumer -- who we know in the end does very little reading in store, at shelf, or on pack. A simple program that communicates a retailer's commitment to green business and gives consumers an opportunity to choose green lifestyles is probably a better bet, even in today's more motivated conditions.

David Forbes, CEO, The Forbes Consulting Group

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