Our business model
As a global food retailer we offer thousands of products. These include our own private brands and other companies' branded products. Private brand products make up 55% of Belgium sales and 27% of U.S. sales. Food makes up 85% of Group sales. 80% of our 3 408 stores (including stores in five new countries) are company-operated, while the remaining 20% are affiliated and franchised.
Our value chain
The value chain is complex and interconnected, but sustainability is a critical element throughout. Like other global food retailers, our biggest challenge remains in the areas where we have indirect influence. However, to be a sustainable business we believe we must use both our direct and indirect influence to improve the entire value chain.
During the last three years, we have made good progress in areas of direct control. Now we are ready to expand our impact through partnerships up and down the value chain. It's a shift our stakeholders increasingly expect as we advance on our sustainability journey.
Setting an effective sustainability strategy means taking the major global sustainability trends into account. These are identified through discussions within and outside of our business. This year four of the five critical trends remain the same as 2010. The new trend is 'economic uncertainty'.
1. Climate change affects every stage of our value chain. As a global retailer we produce almost three million tonnes of CO2 equivalent emissions a year and influence much more through our supply chain and customers. We also recognize the need to prepare for the impact of climate change on our business. It's clear we have a responsibility to take serious action and an opportunity to drive our business forward. With the Rio +20 UN conference on Sustainable Development coming up in 2012, climate change is particularly important.
2. Resource scarcity and food security increasingly impact our business, and the communities in which we operate. Natural resources such as water, fossil fuels, and natural ingredients are depleting, so we must adapt and be proactive in preserving supply. Resource scarcity is driving up raw material costs and threatening supply. By taking action, we see opportunities to safeguard and strengthen our supply chain and protect our customers.
3. Economic uncertainty due to the global financial crisis continues to impact every area of our business – from decreased consumer purchasing power to higher supplier costs. To deal with these issues it's crucial we continue our emphasis on product affordability without compromising quality, nutrition, safety and sustainability.
4. Health across all our markets is a vital element of our responsibility. Action to prevent and manage ailments and diseases like obesity, diabetes, and malnutrition will benefit our local communities, customers and associates. For all of these groups, health is increasingly important as the economic crisis reduces their ability to afford healthcare.
5. Changing consumer expectations require us to be better in every way, from greater transparency, to developing more sustainable products and going beyond traditional lines of responsibility. As consumer trust in business continues to decline, this issue becomes increasingly important.