Indicator 4.1

Issue: Support for the local economy

Indicator: Company policy on sourcing food 'locally'and 'locality' foods

There is considerable ambiguity in the available literature and publicity about definitions of local versus regional and national sourcing. There is also ambiguity over whether local produce is actually transported to central distribution depots and then returned to the local store.[xxv] The following four criteria can be used for assessing how local/regional the produce is:

A survey carried out by CPRE in 2002 questioned 10 supermarkets chains about their policy on local foods, and found that all ten appeared to recognise local food as a sector with potential, and most said they wanted to increase the amount of local food they sold. Some had targets in place, and most said they wanted to increase the number of locally and regionally produced food lines. However, food from clearly identifiable but large regions such as Wales, Scotland and Northern Ireland, and to a lesser extent the south west and south east, dominates much of what is considered by supermarkets as 'local food'.[xxvi]

The Mintel survey published in January 2003 shows that, when it comes to locally grown fruit and vegetables, 14% of consumers claim not to know where to obtain such local produce. This is due in part to a shortfall of information, labelling etc by retailers. It may also be due to a lack of effective advertising by local fruit and vegetable producers, which retailer could help to remedy.

Recent consumer research by the IGD also reveals a demand for locally sourced foods in supermarkets. IGD asked 1,000 consumers what changes they would hope to see at their local supermarket over the next year. 15% of respondents said that locally produced foods made available at the supermarket would make their shopping better in the coming year. This was the third priority after price and promotions, and scored more highly than ‘more information on packaging’, ‘food that is easier to prepare and cook’ and ‘methods of production’.[2]


Case study: Booths supermarket

It is worth looking at one small supermarket chain which has made a clear policy of sourcing a large percentage of its produce from within a defined region. Booths has 26 stores and is based in four northern counties: Lancashire, Cheshire, Cumbria and Yorkshire. Promotions are often based on regional foods, stressing the provenance, variety and quality of regional foods.

In terms of the number of suppliers it works with, Booths sees its approach as different from the other multiples. It sees dangers in the trend towards ever fewer and bigger suppliers (part of the drive towards 'efficient consumer response' using 'category partners' to manage the supply chain). It maintains a large supplier base in order to maintain choice for the company and for customers, and has built up strong links between buyers and suppliers. Some buyers have been working in the same product area for many years, whereas the average turnaround for many buyers working in the multiples is just nine months.

The effort Booths makes in promoting regional produce is significant and they see this as a key element in their promotions and marketing strategy. As with other multiples, few lines are supplied direct from suppliers to store, however the company does source 20-25% of produce from the four counties. It approaches quality assurance at the store end and store managers are tasked to assess produce at the back door and send back unsuitable produce. This means that store managers are knowledgeable on quality and other assurance areas. In terms of general support to the local economy, Booths is little different from other multiples as its purchasing is centralised.

Booths provides a useful example of how supermarket chains could operate by keeping a strong local or regional identity, reducing the flow of produce into and out of regions, and allowing more store autonomy on produce assurance.


What could retailers do about this issue?

The ideal supermarket would provide a window on local agriculture by achieving high levels of support for regional foods and local economies. To further the development of local sourcing customers need to have well-presented, accurate information and guidance. Leaflets currently available have been informative, such as the Tesco's Local leaflet, yet are often ambiguous. In addition, in-store promotions of local produce are infrequent and often misleading.

There is, however, an increasing commitment shown by the major stores, in particular Sainsbury's, to label county of origin and farm addresses, mainly on 'speciality' foods like cheese. Given the huge educational role supermarkets now play, such initiatives and wider promotions can help generate increased consumer awareness of local producers. We would hope to see supermarkets using the whole range of promotional options to generate interest and involvement by the customer. This could include:

We would want to see consistency in approach and a real commitment to increase promotion and reduce ambiguity. A further approach could be for supermarkets to set targets for selling produce and for developing a code for promotions which ensures consistency, accuracy and comprehensibility and which follows the above criteria for defining local/regional produce.

Ideally, each company would implement a policy, with board level support, of sourcing and selling locally, based on the four criteria suggested above for assessing how local/regional the produce is. This policy would be implemented by adopting targets for local and regional produce with minimal reliance on unseasonable imports. Overall the company would have a high percentage of goods sourced locally and regionally compared to nationally and imported. It would be continuously seeking to increase that percentage by developing new lines and delivery operations with producers, and undertaking market research on the products in demand. There would be special provision for the needs of 'small and developing' suppliers. The company would also assist in developing local producer capacity by providing selling or storage space to local co-operatives and sharing customer marketing information to generate ideas on local food needs.

Logistics systems would be greatly modified to handle local/regional sourcing. For instance, the operation of Regional Distribution Centres would be modified to increase the proportion of stock circulated within the region compared to stock for national distribution. Each branch would have a commitment to source directly from neighbouring farms and businesses when produce is available/in-season. Meet-the-buyer events would be run at a local level to discuss possible new products and long term diversification. Suppliers would be trained to meet standards complying with due diligence requirements.


How this indicator will be measured

A questionnaire will be used to identify whether supermarkets have made an initial commitment to supporting local economies through their official policies. This will be the basis for assessing and comparing progress in the following years. The questions acknowledge that different supermarkets may be using different definitions, and focuses attention on the need for a common set of criteria to be established and used as the basis for future work.

The questions will ask how retailers define 'local' and 'regional/locality' food products, and what policies they have on sourcing these. They will ask for information on targets, on the promotion of local/locality foods, and on the level of discretion local store managers have to identify and recommend sourcing of local food products.


[2] IGD Consumer Tracker (part of Consumer Watch), February 2003, IGD

[xxv] Local sourcing: PR or the real thing?, Sustain, 2000, internal document
[xxvi] Down your Way? A CPRE briefing on supermarkets and local food, 2002

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