What do South African supermarket retailers disclose about the sustainability of suppliers?

Abstract

As intermediaries between producers, manufacturers and consumers, retailers are uniquely positioned to influence production practices and consumption trends. Supermarket retailers are increasingly imposing responsibility on their suppliers to improve the sustainability of their supply chains Purpose of study: The ways in which supermarket retailers disclose their sustainable sourcing initiatives are not well understood. The purpose of the study was to investigate the manner in which South African supermarket retailers disclose their sustainable sourcing practices and performance. The objective was to understand if sustainable sourcing is a key aspect of disclosure in the annual reporting of these retailers and if so, what information and performance measures are communicated. Design/Methodology/Approach: The annual reports of the five largest supermarket retailers in South Africa were downloaded from the internet. Content analysis was used to obtain information from the annual reports. Research questions were formulated from which the content categories were defined, for which in turn coded data was extracted from the reports. A scoring system was developed to score the status quo of the coded sustainable sourcing disclosure information. Results/Findings: The results show inconsistency in what information which the different supermarket retailers disclose with regard to sustainable sourcing and how they present it. It is difficult to compare sustainable sourcing practices and performance measurement amongst supermarkets. This has the potential to compromise the competitive advantage of the retailer. Recommendations: The authors recommend a standardised reporting protocol to aid the verification of sustainable sourcing claims and to enable comparisons between retailers. Managerial implication: Being able to disclose information on sustainable sourcing in the supply chains of retailers in a consistent manner, will enable performance comparisons amongst competing businesses. Using a standardised reporting protocol will facilitate the process of consistent and comparable disclosure, providing a basis for continuous improvement.