Changing consumer habits mean that supermarkets should prioritise low carbon transportation.
Wednesday’s news that Tesco had suffered its first annual profits fall in 20 years essentially signalled that the days of the supersized supermarket are over. This was evident in CEO Philip Clarke’s announcement that Tesco would have to write down the value of its £804 million land originally earmarked for such megastores.
This is partly due to the dramatic growth in online grocery shopping, which is expected to double in value to £11.1 billion by 2017.
One of the changes that this has brought about is a re-think in packaging methods, so that more groceries can be loaded into delivery vans whilst also meeting customer presentation expectations.
Another change that will be necessary is how the groceries themselves are transported.
After all, the growth in door-to-door deliveries will increase supermarkets’ Scope 1 Emissions (the term to describe the carbon emissions for which an organisation is directly responsible), with an average delivery van contributing 50,000 tonnes CO2/year.
As such, supermarkets need to pay careful consideration to low carbon transportation if they are to live up to their own sustainability commitments.
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Prospects for this area were initially promising, with Sainsbury’s claiming that it was “serious” in reducing vehicle emissions by buying a battery powered van in 2006, a move that Tesco and Asda followed in 2007 and 2009 respectively.
The Government’s guide on monitoring freight emissions highlights the importance of this area, not least due to ever increasing and fluctuating fuel prices.
Ocado suggests that each delivery van replaces up to 40 car journeys every day, so there is a potential overall environmental benefit to online grocery shopping.
But high capital costs remain a significant barrier to investment. In 2012, for example, Sunderland City Council decided that this made incorporating electric vans into their own fleet currently unfeasible.
The news of Modec, a supplier of electric delivery vans, going into administration in 2011 was particularly disappointing.
Nevertheless, supermarkets’ generally good performance (despite the gloomy economic environment) means that such investments are not beyond the realms of feasibility.
Supermarkets know that online shopping will become ever more central to their business models. As they look to expand their delivery fleets they should demonstrate a strong commitment to high efficiency vehicles and electric/hybrid technology.