- Since the summer of 2021, widespread disruption to supply chains has hit the headlines and become one of the main narratives around the supermarket industry.
- Our media analysis found that Covid is still a big theme when it comes to supply chain disruptions while rising prices have given rise to various controversies.
- We also found that sustainability is becoming a bigger topic, as supermarkets saw supply chain emissions rise despite signing a pledge to cut them, while the media increasingly highlights instances where supermarket supply chains are linked to human rights violations.
We have never heard the phrase “supply chain” as much as we have in the previous couple of years. Far from being the preserve of logistics specialists, it’s entered our everyday vocabularies and made headlines across the world.
This is because supply chain issues have touched multiple aspects of people’s lives, the most obvious of which is how they shop for food. Supermarkets around the globe have been affected—some more fatally than others.
To see how supply chains in the supermarket sector are being discussed in the media, we analysed 516 English-language articles published since June 2022. Here are our main findings:
1. Covid is still a big part of the narrative
The evolution of the supply chain crisis has been complex, with some issues emerging over many years. Some media stories focused on sporadic shortages of specific goods, such as carbon dioxide or petrol, but most journalists focused on how this has impacted food prices, with food inflation being the highest in 45 years due to supply chain disruption.
Not surprisingly, the recent issues made Disruptions the most prominent topic in the supply chain debate:
Many publications pointed out that the ongoing supply chain problems have multiple causes, including labour, transportation and container shortages. Of course, inflation has been rising, around the world, while Putin’s decision to invade Ukraine led to soaring oil and gas prices.
Yet, most journalists noted that supply chain issues in retail really went into overdrive when COVID-19 hit, exposing long-standing structural problems in labour supply. Labour shortages—primarily due to low pay—were causing problems in the industry, particularly in packing plants, processing areas and trucking. As the tide of COVID-19 infections began rising, absenteeism and the need for social distancing only compounded the issue.
So, while Covid seems a thing of the past for many industries, it seems like it’s still a big part of the narrative around supply chains.
2. Rising prices give rise to controversy
The most prominent example was Tesco chairman John Allan suggesting that suppliers could be using this situation to boost prices. Speaking to the BBC’s Laura Kuenssberg about whether food companies were taking advantage of consumers with recent price rises, Allan said: “I think that’s entirely possible”.
This made him the most influential corporate spokesperson in the debate:
While he admitted he hadn’t “seen their cost structures”, Allan said the supermarket chain was fighting “very hard to challenge cost increases”. Tesco has previously refused to stock certain products while haggling over prices with suppliers.
Allan’s comments have been criticised by food firms and farmers alike. They argue that they are suffering from rising costs and often don’t see the benefits of food price hikes.
For example, farmers and suppliers – many of whom are small- and medium-sized firms (SMEs) – have recently argued they are not getting a fair price for their eggs from supermarkets and other big-box stores. The price of a dozen eggs at the till rose by 45p over the course of 2022, but many farmers only saw 5p-10p of that rise, according to figures released in November by the British Free Range Egg Producers Association.
3. Automation gets praised and raises concerns
The media debate also concentrated on how automation can improve efficiency, reduce labour costs, and enable supermarkets to manage inventory better and streamline operations. Automated systems such as robotics, warehouse management systems, and self-checkout machines were frequently mentioned as examples.
Media outlets often highlighted the potential environmental benefits of automation, such as reduced energy consumption, lower carbon emissions, and more efficient use of resources.
A company that stood out in the Automation topics was Walmart, which gained media attention by previewing how it plans to use automation to more quickly and cost-effectively manage inventory, stock shelves and keep up with online orders. The company took investors on a tour of an approximately 1.4 million-square-foot facility in Brooksville, Florida — the first automated distribution centre for packaged foods and other shelf-stable household items.
However, automation in supply chains raised concerns about job displacement and the potential loss of employment opportunities for human workers. Media outlets often discuss the need for retraining and reskilling programs, as well as the potential impact on communities that rely on jobs within the supermarket industry.
4. Sustainability becomes a bigger reputation priority
Since supply chains contribute up to 90% of supermarket greenhouse gas emissions, a big chunk of the media debate discussed strategies to reduce this environmental impact, such as optimising transportation routes, using cleaner energy sources, and promoting local sourcing of products.
The top trending news in our research sample concerned Tesco, Sainsbury’s, the Co-op, Marks & Spencers and Waitrose, which saw scope three supply chain emissions rise despite signing a pledge to cut them, according to the World Wide Fund for Nature (WWF).
The report, What is in store for our planet: the impact of UK shopping baskets on climate and nature, came as world leaders met in Egypt for the COP27 climate change summit in November 2022. Some panellists were quoted as saying that the global food system is responsible for more than 30% of total climate change emissions and 60% of biodiversity loss, and retailers – the bridge between those who produce our food and the consumers who eat it – have an essential role to play in reshaping that system.
Sustainability became a big part of Tesco‘s comms efforts, with its latest initiative – an innovation accelerator program – making it the most influential organisation in our research sample in terms of media impact.
We determine an organisation’s media impact in the context of a topic by looking at its media influence score calculated in terms of coverage by high-profile media outlets, topic relevancy score measuring its contextual relevance, and media visibility as measured by the number of mentions.
Tesco partnered with World Wildlife Fund (WWF) to run an innovation accelerator program that matched startups with longstanding suppliers to pilot and scale innovative sustainability solutions. The startups work with Tesco’s fruit and potato suppliers to improve production, helping the retailer to build out the missing links between entrepreneurs and seasoned producers and bringing climate tech into action.
5. Human rights are the main pain point
Media outlets often reported on the importance of fair labour practices, such as paying living wages, ensuring safe working conditions, and upholding workers’ rights to organise and bargain collectively. As human rights violations tend to become big media stories, unfair labour practices have become a big reputation pain point for supermarkets.
The top-trending human rights story in our research sample was 130 migrant factory employees accusing Tesco of human rights abuses. The employees worked in a garment factory in Mae Sot, Thailand, between 2017 and 2020, making jeans and other clothing for Tesco’s F&F label.
They reported a plethora of abuses including pay less than half the Thai minimum wage; 99–hour work weeks and no complaints under threat of blacklisting; unsanitary housing with concrete floors to sleep on and no doors, locks, or even ceilings; confiscation of documents and bank cards; and no sick pay, days off or overtime pay.
In the meantime, the UK’s leading supermarkets took a new PR approach by forming a task force that will fund independent audits on British farms after investors called on food retailers to eliminate the risk of worker exploitation in their supply chains. The move from grocers including Tesco, Sainsbury’s, Ocado and Waitrose, followed widespread reports that Asian agricultural workers had come to the UK after paying exorbitant fees to hiring agencies in their home countries, leaving them effectively working to pay off debts.
The controversy surrounding migrant farm workers has added to pressure on UK businesses and the government as they face a shortage of foreign workers. The supermarkets, which also include Aldi, Co-op, Asda and Morrisons, said in their letter that “the task force is working to develop and implement tangible actions to help mitigate risks of worker exploitation” and “to improve worker welfare”.