Sustainability drivers in food retail

Abstract

Sustainability has become a relevant issue for retailers. We develop an integrated model with three drivers of retailer's investments in sustainability. First, the more their processes, human resources and customer driven capabilities are developed, the more investments in sustainability tend to occur. Second, retailers leverage their relationships with suppliers to invest in sustainability. Third, competition and economic instability may also lead to long run investments in social and environmental. We tested three hypotheses by surveying 101 retailers operating supermarkets, hypermarkets and neighborhood stores that focus mainly on food with a limited offering of general merchandise and apparel. Our results show the importance of customer driven capabilities for investments in sustainability. Communication with the supplier also has an impact on investments, while the process and policies of the supplier relationship do not. Retailers invest in sustainability to coordinate this relationship. Our study sheds light on the drivers for sustainability and offers an understanding of how a retailer may invest further in sustainability.