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A woman carrying a bag of groceries. Consumer demands on sustainability are shaping retail industry

Reshaping Retail: How ethics and sustainability are changing retail’s ecosystem

Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking shares her insights into our latest research on how changing consumer behaviours are reshaping retail and how UK retailers are responding to consumer demands around ethics and sustainability in particular. Hear from toy retailer The Entertainer on how the company is thriving due to their strategy being focused on their own core values.

Ongoing evolution

We are now seeing a marked and steady shift among consumers and retailers towards an even greater prioritisation of sustainable and ethical standards when they make purchases or sell goods.

Ethical excellence in the way retailers conduct business is also rapidly becoming a non-negotiable requirement for any business serious about its long-term place in the market.

Karen Johnson

Head of Retail & Wholesale, Barclays

For today’s consumer, the retail purchasing decision is increasingly influenced by factors outside a basic need or desire for the product. And while this is not a recent phenomenon, the results of our research reveal a distinct shift in thinking towards ethical and sustainability credentials – suggesting that the movement towards buying ethically-sourced, ethically manufactured goods that are sustainable and environmentally harm-free is gaining greater traction among consumers.

The retail sector is becoming increasingly clear about the role that ethics and sustainability play in its future commercial – and social – success with 77% of retailers agreeing that ESG membership bodies are effective in helping them improve.

To improve their ethical supply chain credentials, our research indicates that over £7.1bn of supplier contracts were cancelled in the last 12 months alone by UK retailers.

63% of consumers believe the retail sector should go further to improve its ethical and sustainability credentials.

No longer is the discourse simply dominated by the efficient use of plastics, dedicated recycling regimes or use of renewable energy. Attitudes have matured – and hardened – among a growing consensus that transparency and authenticity, rather than cosmetic moves to ‘go green’, are needed in the effort to face down the risks to our collective future.

Karen Johnson

Head of Retail & Wholesale, Barclays

Strategies for success

Retail operators can future-proof their business by making ethics and sustainability a new norm.

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  • Think long term

    The rise in importance of sustainable and ethical trading is significantly marked among the younger generation. Retailers should be operating with an eye on the expectations of those who will dominate spending patterns for the next 20 years.

  • Boost supply chain credibility

    Values-led business practice is infectious if you boost ethical and sustainable integrity across your supply chain. One strategy would be to develop minimum standards that raise quality – but take action against suppliers falling short.

  • Evolve your green strategy

    Whether exploiting basic efficiencies or delivering root-and-branch strategies, retailers are applying more sustainability – for example to their vehicle fleet, premises and output – with renewable energy solutions, fossil-fuel-free transportation or fashion recycling.

  • Embrace ethics

    The interdependency of retail supply chains means that the positive impact of fair, diverse and inclusive working policies can be a boost to the whole sector. Retailers should consider the benefits to productivity and wellbeing that staff centred business models can bring, bearing in mind that those values need to be the norm and not the exception.

  • Nurture a culture of change

    Beware of greenwashing your business model for positive effect. To demonstrate authenticity, retailers should make a virtue out of ESG policies with audits to hold their own performance to account. This could include agreeing ethical and sustainability-linked measures within financial agreements, or staff incentives to create externally monitored accountability.

Case study: The Entertainer

Despite the rise of e-commerce, The Entertainer trades heavily on core values that have seen it continue to thrive on the traditional retail experience.

The company’s approach to supply chain management reflects this values-led philosophy. Through its sister company, which produces the Addo Toys range, the business carefully monitors its offshore source manufacturing.

Read our case study to learn how The Entertainer has grown from a single store in Amersham, Buckinghamshire to 173 stores across the UK, 35 in Spain, and a number of franchise locations.

Image of an Entertainer store

Our values are for life, not just for the good times. A short-term gain might get you through a quick fix, but you’re going to have to live with the consequences.

Gary Grant

Founder and Executive Chairman, The Entertainer

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