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Viewpoint: Waste reduction should be second nature when it comes to cutting costs

In the current economic climate, any tensions between businesses’ commercial and environmental commitments are under even greater scrutiny. However, retailers must not feel cornered into making a straight choice between either maintaining a commitment to environmental efficiency or concentrating on protecting their bottom line. By Andy Dawe, head of retail at WRAP (Waste & Resources Action Programme)

GENERAL MERCHANDISE

Viewpoint: Waste reduction should be second nature when it comes to cutting costs

In the current economic climate, any tensions between businesses’ commercial and environmental commitments are under even greater scrutiny. However, retailers must not feel cornered into making a straight choice between either maintaining a commitment to environmental efficiency or concentrating on protecting their bottom line. By Andy Dawe, head of retail at WRAP (Waste & Resources Action Programme)

The simple truth is that there is an opportunity to do both with a large number of retailers and their suppliers already leading the way, making significant cost savings in the process.

For starters, retailers and suppliers who work together to minimise raw material use, transport and energy could make significant reductions to their cost bases

and subsequent improvements to profit margins without any negative impact on sales.

For example, Marks & Spencer's 200 million Plan A environmental scheme was 'cost neutral' during 2007/8 due to the efficiencies made. Asda estimates it has saved in the region of 10m on packaging since agreeing to the WRAP-led Courtauld Commitment on waste reduction in 2005. Asda has also made a feature of its 'Green Roll Back' in recent TV advertising campaigns, whereby cost savings are reinvested to offer competitive price deals.

In fact, research estimates that the retail sector in the UK could save as much as 1.3bn by taking action that is either no cost or offers a short payback period of one year or less. Practical steps include packaging optimisation, which can help reduce raw material use plus minimise transport and storage requirements too. For example, reducing the size of a standard cereal box by 18% - or the equivalent of a small match box - can save 18 tonnes of raw material, 50 tonnes of CO2 and remove 10 vehicles from the road, for every million packets sold.

Media commentators have picked up on the apparent contradiction between campaigns designed to prompt behaviour change in consumers, such as minimising food waste, and the need for retailers and their supply chains to maintain and grow sales. However, even when a direct sales impact is likely as part of an environmental initiative - this may be offset by the cost efficiencies available by reducing waste within the supply chain itself. It also helps to encourage customer loyalty by helping people to get the best from the food that they buy. Morrison's 'Great Taste Less Waste' and Sainsbury's 'Love Your Leftovers' campaigns are good examples of this.

Environmental innovations such as refillable technology - helping to minimise packaging waste by enabling consumers to use self-dispensing options in store - also have the potential to change the way we shop in the UK in the longer term and build increased brand loyalty.

So while we accept that reducing waste is not always a simple equation, WRAP continues to be committed to working in partnership with the retail supply chain as part of the Government's wider packaging strategy. Together our aim is to identify innovative and commercially viable solutions so that - from design to disposal - packaging is the very best it can be for shoppers, the environment and the bottom line.

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