Alvarez & Marsal Report Studies Impact of Sustainability on Grocers

New Alvarez & Marsal Sustainability in Grocery Report Finds “Responsible Retail” More Profitable and Effective

• Becoming more sustainable is a new consumer-driven imperative
• Millennial and Gen Z consumers are pushing for sustainability at the grocery store
• Measuring the gap between consumer perception of grocers’ sustainability and reality

New York, NY—September 29, 2022—Global professional services firm Alvarez & Marsal’s Consumer Retail Group (A&M CRG) today released its newest grocery report, The Grocer’s Sustainability Playbook: How Sustainability Can Boost Your Bottom Line, which looks at the growing role and influence of sustainability and the eco-conscious consumer across the grocery industry.

Based on field observations of co-authors David Ritter and Jeremy Levine, former operators in the grocery space, The Grocer’s Sustainability Playbook offers practical tips that grocers can put into practice in the next 3 to 6 months, .

“Our objective was to understand how sustainability solves traditional pain points and conversely, to identify new potential new pains it creates,” noted David Ritter, Managing Director at Alvarez & Marsal’s Consumer Retail Group. “Sustainability is more critical now than ever, but it’s a word with multiple meanings. We tried to break down everything encompassed in the term “sustainable” for the grocery industry, including consumers, retailers and investors.”

The study found that:

• “Quick wins” for grocers include making targeted assortment upgrades, reducing store delivery frequency, shifting to domestic sourcing, and reducing waste, especially in fresh
• Grocers can implement meaningful change in merchandising, supply chain, and store operations
• Benefits of taking sustainability measures go beyond helping the planet to include greater customer loyalty and buy-in and improved topline and gross margin
• Sustainability is growing in importance for investors as well as consumers

“Sustainability is no longer only a matter of corporate responsibility—it’s non-negotiable in the eyes of consumers,” added Jeremy Levine, Director at Alvarez & Marsal’s Consumer Retail Group. “The difference between greenwashing and accelerating true sustainability is not lost on them, and millennials in particular are demanding and driving sustainability practices.”

The report provides insights into and examples of how grocery leaders can execute on improvements in merchandising, supply chain, and store operations. It finds that retailers can improve and leverage their sustainability offerings by improving awareness across vendors, updating packaging, and focusing on those categories where sustainability matters the most.

“In many cases there’s a gap between the consumer’s perception of a certain grocer’s sustainability and the reality,” added David Ritter. “For example, according to Green Matters, Aldi, which is actually number one in sustainability practices, does not get nearly the level of credit from consumers that Whole Foods (number two) enjoys. If they are to see the benefits of their hard work, grocers need to clarify their sustainability messaging, ensuring that all eco-friendly product claims are labeled clearly and understandably for shoppers. And they should prioritize sustainability coming out of the pandemic, or risk being left behind.”

To download a pdf of The Grocer’s Sustainability Playbook, please visit:

https://alvarezandmarsal-crg.com/insight/grocers-sustainability-playbook/

About Alvarez & Marsal Consumer Retail Group

The Alvarez and Marsal Consumer and Retail Group (CRG) is a management consulting firm that tackles the most complex challenges and advances its clients, people, and communities toward their maximum potential. CRG combines the best of A&M’s broader firm’s bias toward action and practicality with deep consumer and retail industry experience. CRG partners with businesses across a wide range of categories including Food & Beverage, Beauty & Personal Care, Grocery, Mass Merchandise, and Apparel & Footwear to drive significant performance improvement.