How to become a more sustainable retailer

The retail industry is crucial to the UK economy.

It accounts for 5% of the economy, pays £17bn in business taxes, and consists of more than 300,000 businesses.

It is also the UK’s largest private-sector employer with 3 million employees, equal to 8% of all jobs.

Despite the rise of e-commerce and challenging economic conditions in part due to the Covid-19 pandemic, shops remain a key feature of our towns and cities.

They provide essential goods and services, and cater to the needs of thousands of local communities.

Small, online retailers also contribute to a vibrant sector.

With such a reach, the industry also has a vital role in tackling climate change.

Retail, including product supply chains, is one of the biggest contributors to UK greenhouse gas (GHG) emissions.

In 2017, it was responsible for 31% of all GHG emissions (PDF, 7.7 MB).

New UK Government regulations, such as the Plastic Packaging Tax, are putting pressure on retailers to decarbonise.

Consumers are demanding it too.

A study by IBM found almost six in 10 people were willing to change their shopping habits to reduce their environmental impact.

Over 70% were willing to pay a premium of 35%, on average, for greener products.

This shows how being more sustainable is not only good for the planet; it can boost retail sales too.

Outlined below are tips to kick off your journey to becoming a more sustainable retailer.

The information is not exhaustive, and it won’t necessarily apply to all retailers, but this guide provides initial ideas on how to improve your sustainability.

There are many other business resources to engage with for further advice, and there are valuable links throughout for additional guidance and help.

Supply chain and community collaboration

According to the British Retail Consortium, upstream supply chain GHGs make up the majority of retailer emissions (70% or more of total food retail emissions, for example), so collaboration between suppliers and retailers is crucial to combating climate change.

Joining forces with other local retailers can help you form a powerful collective voice.

You could share equipment and tools so new items don’t have to be bought and place orders from suppliers as a group to save on transport costs and reduce carbon emissions.

You can also collectively call on suppliers to be more green.

Several businesses doing that can have much more impact than just one.

Think local too when sourcing suppliers to cut emissions and cuts.

The popularity of the ‘shop local’ movement with customers means it can also be used as a marketing message.

Consider the materials being used by your suppliers.

If you’re a clothing retailer, can you encourage them to switch to using organic or plant-based textiles?

What packaging does your supplier use?

Work with them to remove unnecessary packaging and to adopt more sustainable options.

Set up a social media or WhatsApp group with other retailers and interested parties to share knowledge, learnings and best practices from your sustainability journey.

Go paperless

More than 11bn paper receipts are printed every year in the UK, which generates over 28,000 tonnes of carbon emissions.

Around 9.9bn of those receipts are wasted.

That’s the equivalent of 53,000 trees being cut down and destroyed.

Ask customers if they want a receipt and offer them the option of sending it as an email instead.

This has the added benefit of building your marketing database, as long as in doing so you comply with data protections regulations.

The ‘Beat the Receipt’ campaign, backed by the British Retail Consortium and the British Independent Retailers Association, calls on retailers to make receipts optional in all stores by 2023.

Recycling, repairs and returns

Increasing the lifespan of products can lead to a significant reduction in carbon emissions.

According to Keep Britain Tidy, 10,000 items of clothing are thrown into landfill every five minutes in the UK.

If consumers increased their active use of clothing by nine months, the UK’s carbon, water, and waste footprints would be cut by 20-30%.

Ways to encourage extended use of products include offering customers an in-store repair service, providing advice on how they can fix or repair products themselves, and sending reminders when an item is due to be serviced.

Another idea is providing a returns scheme for unwanted products in return for vouchers or discounts.

The products can be refurbished and resold or given to a charity.

You could also set up a swap shop so customers can exchange an unwanted product for one that they do want.

Remove or improve packaging

Reducing, removing, or using more sustainable packaging can significantly impact cutting a retailer’s carbon footprint.

The overuse of packaging, particularly single-use plastic, is one of the planet’s biggest environmental challenges.

Consumers are demanding businesses act.

Research by the Chartered Institute of Marketing (CIM) found that 82% of UK adults believe companies use too much packaging when delivering or selling in-store products, and 78% want businesses to do more to promote sustainable packaging.

Regulatory pressures are increasing too.

From 1 April 2022, retailers using less than 30% recycled plastic packaging may be subject to a levy under the government’s new Plastic Packaging Tax rules.

Retailers should audit the use of packaging across their operations and aim to eliminate any that is non-essential.

Encourage suppliers to do the same.

The packaging that you retain should contain as little single-use plastic as possible and be recycled and recyclable.

Steps retailers can take include eliminating unnecessary air packs and bubble wrap from deliveries, removing the wrapping from product multi-packs, scrapping plastic wrapping and hangers from clothing, and eliminating plastic from greeting cards and wrapping paper.

‘Naked’ packaging initiatives are growing in popularity among food retailers.

Fruits and vegetables are sold without packaging, and a “misting” refrigeration system is used to keep produce fresh.

A ‘food in the nude’ project by a New Zealand retailer led to a 300% increase in sales of some vegetables.

You can also encourage customers to reuse your packaging or bring their own.

Provide incentives such as free products and discounts, offer a packaging pick-up service from customers’ homes, or set up a deposit return scheme.

A compulsory scheme for plastic bottles, which involves people paying a small fee which they get back when the bottle is returned, will be introduced in Scotland in August 2023 and by 2024 in England, Wales and Northern Ireland (PDF, 882 KB).

Zero waste shops, which store products in plastic-free containers so customers can fill up their own bag, box or bottle, are popping up on high streets across the UK.

Zero waste is also a popular model for subscription services.

For example, soap and shower gel for refilling bottles can be delivered in plastic-free and compostable packaging.

Consider how you can use similar approaches for your retail operation.

Make your use of sustainable packaging a reason for people to shop with you.

The CIM survey found that the number of people keeping packaging to wrap their own gifts grew from 12% in 2020 to 25% in 2021.

As well as being sustainable, make your packaging appealing and attractive.

Finally, attract new customers by signing up to a scheme like Refill, which lists retailers offering free water refills, plastic-free shopping and rewards for using reusable cups.

Further reading on sustainable retail

Through its Climate Action Roadmap, the British Retail Consortium encourages the retail sector to work to achieve net zero emissions by 2040, 10 years ahead of the government’s 2050 target for the whole of the UK.

It’s a bold move, but the retail sector is an innovative one, and new start-ups entering the market with sustainability at the heart of their business can help achieve the aim.

The roadmap says retailers should take action in five areas:

  • putting GHG data at the core of business decision making
  • operating efficient sites powered by renewable energy
  • moving to low carbon logistics
  • sourcing sustainably
  • helping employees and customers to live low carbon lifestyles.

This guide is just a starting point for building a sustainable retail operation, and you should access further advice.

The SME Climate Hub has several resources, including specific guidance for retailers.

The Retail Sector Council’s Green Street is a guide to helping smaller retailers slash their carbon footprint and become more sustainable.

Finally, the British Independent Retailers Association has a sustainability hub, and the Greenpeace Unpacked (PDF, 29.8 MB) report explains how grocery retailers can cut plastic packaging in half by 2025.

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

Green Decoder

Featuring a glossary of sustainable terms curated in partnership with the Nottingham Business School, Nottingham Trent University, our green decoder is helping smaller businesses decipher the terminology surrounding decarbonisation.

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