1. An investigation into the unethical supply chain
management of UK supermarkets
Leon Winter 12004116
BA (Hons) Marketing Management
11th April 2016
Word count 10,868
This research project is submitted in part fulfilment of the requirements for
the degree of BA Honours in Marketing Management at the Manchester
Metropolitan University Business School

2. Statement of Originality
This Research Project is an original and authentic piece of work by me. I have fully
acknowledged and referenced all secondary sources used. It has not been
presented in whole or in part for assessment elsewhere. I have read the
Examination Regulations, and am fully aware of the potential consequences of any
breach of them.
Signed…………………………………………………..
Date……………………………………………………..

3. Acknowledgements
I would like to thank my tutor Dr Costas Theodoridis for his help via drop in sessions
and via email to guide me towards my chosen area. Without him I am sure this topic
would have been too broad and I’m sure I would have struggled to get this finished.
Also to my parents, Nigel and Sue for believing in me and supporting me throughout
my life. Without them I would not be in the current position where I am about to
graduate.
Finally, two friends Beth Portland and James Alexander who have been there since
the first day. They have always motivated me and been by my side every step of the
way.

4. Table of Contents
Abstract ........................................................................................................................0
1.0 Introduction ..........................................................................................................1
1.1 UK Supermarket Industry...................................................................................1
1.2 Problems Affecting UK Supermarkets ..............................................................1
1.3 Current Key Issues in the UK Supermarket Supply Chain................................3
1.4 Research Aim.....................................................................................................6
1.5 Research Objectives..........................................................................................6
1.6 Chapter Synopsis ...............................................................................................7
2.0 Literature Review.................................................................................................8
2.1 Introduction to Literature Review .......................................................................8
2.2 Supply Chain Management.............................................................................8
2.3 UK Supermarket Supply Chain .........................................................................9
2.3.1 The Tesco Role...........................................................................................9
2.3.2 Aldi & Lidl: The German Discount Model..................................................12
2.4 Ethics...............................................................................................................14
2.5 Business Ethics................................................................................................14
2.6 Business Ethics of UK Supermarkets..............................................................15
2.7 Business Ethical Standards ............................................................................16
2.8 Ethical Policies in Business .............................................................................16
2.9 Unethical Business Practices ..........................................................................18
2.9.1 Discounter’s Ethical Issues ......................................................................18
2.9.2 EU Working Conditions ............................................................................19
2.9.2 Modern Day Slavery .................................................................................19
2.9.3 Exploitation of Migrant Workers in the UK ...............................................20
3.0 Methodology.......................................................................................................22
3.1 Introduction to the Methodology.......................................................................22
3.2 Research Philosophy .......................................................................................23
3.3 Research Approach .........................................................................................24
3.4 Strategy ...........................................................................................................25
3.5 Research Design .............................................................................................25
3.6 Questionnaire Design ......................................................................................26
3.7 Data Collection ................................................................................................27
3.8 Sampling ..........................................................................................................28
3.9 Data Analysis ...................................................................................................28

5. 4.0 Findings and Analysis.......................................................................................29
4.1 Introduction to Findings and Analysis ..............................................................29
4.2 Online Questionnaire Findings.........................................................................29
4.2.1 Questions 1 & 2 – Respondent Demographics.........................................29
4.2.2 Questions 3 - 8 – Consumer Buying Behaviour ........................................31
4.2.3 Questions 9 - 15 – Consumer Ethical Perceptions ...................................36
4.2.4 Questions 16 - 19 – Perceptions of Supply Chain Management..............42
5.0 Conclusion and Recommendations ................................................................45
5.1 Objective One...................................................................................................45
5.2 Objective Two...................................................................................................46
5.3 Objective Three ................................................................................................48
5.4 Objective Four ..................................................................................................49
6.0 Critical Reflection...............................................................................................52
7.0 References..........................................................................................................53

6. Abstract
The primary aim of this dissertation is to investigate the unethical practices that exist
within the supply chain management of the UK’s leading supermarkets.
These companies have acquired enormous power and wealth and exercise huge
control over the tastes and buying habits of the British public. In the process, this
has led to unethical financial practices between the supermarkets and their
suppliers, built up over many years, and created complex and extended supply
chains, many to distant places, that are difficult to monitor and open to abuse.
This dissertation will show how the market rivalry between the UK’s traditional
supermarket chains to source products as cheaply as possible, exacerbated by the
arrival of the German ‘discounters’ Aldi and Lidl, has led to worker exploitation
within those supply chains and a further erosion of ethical values.
This investigation will examine the initiatives being taken, and the pressures being
placed on the supermarkets to improve standards, as they are forced to respond to
the demands of a new breed of ethical consumer.

7. 1
1.0 Introduction
1.1 UK Supermarket Industry
The phenomenon of self-service food shopping came to Britain 68 years ago on
January 12th
1948, when the London Co-operative Society opened the first full-scale
self-service grocery store in Manor Park, London. The concept had started in the
United States 32 years earlier in Memphis, Tennessee with the opening by its
creator, Clarence Saunders, of the Piggly Wiggly store. It boasted many of the
original features we see in supermarkets today. There was a wide selection of
products, each item was individually priced, there were shopping carts, checkout
counters and of course, self-service.
The concept spread rapidly in the UK and names with which we are familiar today
were soon established and became market leaders. Family grocers, Sainsbury’s,
opened their first supermarket in 1950, Tesco in 1954, the Morrison family in 1961
and Asda in 1965.
Figure 1.1: The ‘Big Four’ UK supermarkets
From the beginning, the UK supermarket industry was oligopolistic and has been
historically dominated by the ‘Big Four’ (Figure 1.1). These companies acquired
enormous power and wealth as they grew, exercising huge control over the tastes
and buying habits of the British public. In the process, they established highly
complex supply chains, which stretched across the world. At one time, Tesco alone
sourced as many as 90,000 different product lines through its supply chains (The
Guardian, 2015).
1.2 Problems Affecting UK Supermarkets
In 2008, the established UK supermarket landscape began to change with the
beginning of the global recession and the financial pressures it placed on the whole
retail sector. It changed shopping habits. Consumers wanted to save money and
went in search of bargains, resulting in less loyalty to any one particular
supermarket brand.

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They became increasingly price conscious. Some were driven by economic
necessity, for others it was a lifestyle choice. It gave birth to a new fashion trend,
and the individual known as the ‘thriftanista’, the savvy shopper, who is admired for
their ability to hunt down the best supermarket bargains.
Rise of the Supermarket Discounters
At the heart of this change in UK shopping habits were the two German discount
supermarket chains, Aldi and Lidl. Despite their presence in the UK for 26 and 22
years respectively, their impact on the “Big Four” - Tesco, Sainsbury’s, Asda and
Morrison’s - had been limited until the 2008 global recession. Since then their
growth has been phenomenal. They now jointly control 10% of total British grocery
sales – double their market share of three years ago (Kantar Worldpanel, 2015).
These gains have been made at the expense of their traditional British rivals. They
seem unstoppable.
Change in British Consumer Shopping Habits
The seismic changes in the British consumers’ supermarket shopping habits is not
due solely to the competitive challenge posed by discounters like Aldi and Lidl.
1) There has been an explosion of small convenience stores in the high street,
petrol stations and in new property developments, many of them created by
the major supermarkets. Their purpose is to entice the busy office worker,
the person on the move. They are local, convenient and easy to access, with
a limited product range.
Consumers have embraced this ‘top up’ shopping concept. It has created a
whole new lifestyle for many, who buy only for their immediate needs and
who reject the traditional big supermarket ‘shop’. The proliferation of these
convenience stores has extended consumer choice and heightened the
competition between the warring factions.
2) UK on-line grocery shopping is on a
rapid growth curve. Over the next five years
it is predicted it will be one of the fastest
growing parts of the retail food industry
(Figure 1.2). By 2020, it is estimated this
sector of the market will double in value to
£17.2bn (IGD, 2015). The recently
Figure 1.2: Growth of online-grocery
shopping in the next five years
Source: IGD, 2015

9. 3
announced partnership between Amazon - the world’s largest online retailer
and Morrisons - the supermarket chain, to supply an online delivery service
to UK consumers, is an indication of the growing importance of this sector of
the market (Financial Times, 2016). It has created an additional area of
competition between the rival supermarket chains to gain market share and
is also a further example of shifting consumer tastes.
1.3 Current Key Issues in the UK Supermarket Supply Chain
Historically, the UK supermarket industry has made some significant attempts to
behave ethically in its supply chain management. Tesco’s Carbon-labelling initiative
(2007) and Sainsbury’s Fairtrade bananas (2012) made headlines when they were
first introduced. However, as the mainstream UK supermarkets have had to slash
prices to compete with the discounters, there is evidence that in the competitive
price war ethical commitments are being eroded.
Treatment of Britain’s Dairy Farmers
A classic example is the typical British dairy farmer, who for many years was placed
under enormous pressure to supply the supermarkets with milk at an unsustainably
low price level. As a result, over the last ten years, half of Britain’s dairy farmers
have gone out of business – many of them small family enterprises (The Guardian,
2015).
With the main supermarkets’ price cutting wars with the discounters, this situation
reached a crisis point in early August 2015. It led to ugly protests, when farmers
herded cattle through supermarkets in protest at the rock-bottom prices they were
being paid for their milk (BBC News, 2015). There was widespread criticism of the
gouging price policies of all the supermarket chains by the press. They finally had to
bow to this pressure, unilaterally agreeing to pay a guaranteed minimum sum to the
farmers for all milk sold in UK supermarkets (The Telegraph, 2015).
Horsemeat Scandal
One of the biggest scandals to hit UK supermarkets occurred in January 2013.
Various frozen beef products at the lower end of the product range were found to be
adulterated with horsemeat. Data revealed Tesco, Asda and ‘discounter’ Aldi were
the biggest culprits (BBC News, 2013).
This occurred at a time when suppliers’ costs had been soaring and beef prices
were at a record high, because of the price of grain needed to feed cattle (The

10. 4
Guardian, 2013). According to the product, manufacturers had secretly used, in
varying degrees, horsemeat in place of beef, as a cheaper substitute.
The scandal did not end there. It also exposed weaknesses within the
supermarkets’ extended supply chains. In a survey commissioned by the global
supply chain risk management firm, Achilles, it was discovered that 40 per cent of
food manufacturers had “never mapped out their entire supply chain to find out
exactly who their suppliers are” (CIPS, 2014). It was determined, the longer the
supply chain, the greater the risk of malpractice. With a shorter supply chain, things
were less likely to go wrong.
Tesco’s Bullying of their Suppliers
‘Power corrupts; absolute power corrupts absolutely…’ (Historian and moralist Lord
Acton, 1887).
Tesco’s dominance of the supermarket business had grown to such an extent by
2007, that it controlled 31 per cent of the total UK grocery market. In that year, it
was estimated that one pound in every seven spent in British shops went into a
Tesco till (The Telegraph, 2007). This huge commercial power had given birth to a
bullying corporate culture, which Tesco exercised without restraint when dealing
with many of its suppliers. Its ruthlessness became legendary.
This led to an investigation into Tesco’s activities
by the supermarket watchdog, the Groceries
Code Adjudicator (GCA), whose findings were
finally published in an 84-page report in January
2016. Led by Christine Tacon, the GCA has the
power to name and shame companies who
behave unethically and then issue public
recommendations. In the GCA Report, Tesco were censured for having
“intentionally delayed” paying suppliers, in order to “improve its own financial
position” and “prioritising its own finances over treating suppliers fairly” (Figure 1.3).
Tacon said the most shocking thing she discovered was how widespread the
practice of delaying payments was, sometimes for years and arbitrarily deducting
major sums from payments to suppliers, in order to meet Tesco’s own financial
targets (Groceries Code Adjudicator Report, 2016). A clearer case of ‘chiselling,
devious and code-breaking behaviour’ would be hard to find, commented Nils
Pratley, The Guardian’s financial editor (The Guardian, 2016).
Figure 1.3: Christine Tacon, Groceries
Code Adjudicator

11. 5
Under new management, Tesco has promised to mend its ways, especially as they
now stand accused by the Financial Conduct Authority (FCA) of major financial
irregularities, an extremely serious offence. Evidence of this first emerged in late
2014. It was discovered Tesco had artificially inflated profits by £263m in its half-
year results. Although the case is ongoing, it would appear the supermarket chain,
in order to boost its profits, had embarked on a policy of what is known as
‘aggressive accounting’. This involved Tesco seeking agreements from its suppliers
to defer payments owed to them, in order to temporarily inflate its profit margins.
Reports also suggest Tesco booked supplier contributions that were conditional on
hitting sales targets that were unachievable (The Telegraph, 2014). At the heart of
this scandal lay Tesco’s attempts to cover up the decline in its market share of the
UK supermarket business, as ‘discounters’ Aldi and Lidl made further inroads into
its once dominant position.
“It is this slide that lies at the heart of the aggressive accounting scandal but, rather
than fix the growing problems, Tesco pushed its numbers to make things appear
healthier than they actually were” (Acca Global, 2015).
Tesco is likely to pay a heavy price for its unethical behaviour. In its most recent
annual report, the company stated any legal investigation into its financial dealings
with its suppliers and its overstatement of its profits “could have a material and
adverse impact on the group’s financial condition” (The Guardian, 2015). It currently
faces a £500m fine from the Serious Fraud Office (SFO) over the accounting
scandal, but further investigations are ongoing (Marketing Magazine, 2016).

12. 6
1.4 Research Aim
1.5 Research Objectives
Figure 1.4: Research Aim and Objectives

13. 7
1.6 Chapter Synopsis
Figure 1.5: Chapter Synopsis

14. 8
2.0 Literature Review
2.1 Introduction to Literature Review
2.2 Supply Chain Management
The term ‘supply chain management’ was a phrase first used by Keith Oliver, a
leading British logistician and consultant, in a landmark interview with the Financial
Times on 4th
June 1982. Prior to that time, businesses used terms such as ‘logistics’
and ‘operations management’ instead (Hugos, 2006).
McKellar (2014) defines the term ‘supply chain’ as “a metaphor used to represent all
the individual firms, their personnel, and the physical infrastructure required to
create and transport products to customers” (see Figure 2.1).
The management of such supply chains has been described by the professional
body the American Production and Inventory Control Society as: “the design,
planning, execution, control, and monitoring of supply chain activities with the
objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand, and measuring performance
globally” (APICS).
In the 34 years since Keith Oliver’s creation of the phrase “supply chain
management”, the term has been redefined, as supply chains have become
increasingly more sophisticated. Hugos (2006) describes these changes as follows:
“SCM acknowledges all of traditional logistics and also includes activities such as
marketing, new product development, finance and customer service”.
Supply chains have become an essential and integral part of modern, successful
organisations. “Businesses depend on their supply chains to provide them with what
they need to survive and thrive” (Hugos, 2003)

15. 9
The main focus of every supply chain is on “total system efficiency and the equitable
monetary reward distribution to those within the supply chain. The supply chain
system must be responsive to customer requirements” (Hines, 2004).
Figure 2.1: Basic linear supply chain model (McKeller, 2014)
2.3 UK Supermarket Supply Chain Management
2.3.1 The Tesco Role
In the year to March 31st
2015, the UK grocery market was worth £177.5 billion and
accounted for 51.3p in every £1 of UK retail sales (IGD, 2015). As the industry
leader, Tesco’s share of the UK supermarket business was 28.7% (Kantar
Worldpanel, 2015).
“It is generally recognised that Tesco has one of the
most effective and efficient grocery supply chains in the
UK, if not the world. The transformation of the company
has been remarkable since the early 1980s, and this has
been supported and driven in part by its development of
its supply chain management function” (Sparks, 2010).
Tesco’s supply chain management had been guided by
its core purpose of creating value for customers in order
to earn their lifetime loyalty. The favourite slogan of
Tesco’s founder, Jack Cohen, was “Pile it high, Sell it
cheap” - but this changed (Figure 2.2).
Figure 2.2: Jack Cohen,
Founder of Tesco

16. 10
“The key period for Tesco's supply chain initiatives was between 1983 and 1996;
during this time, the company introduced several systems including point of sale
scanning, centralized ordering, centralized distribution, automated warehouse
control and electronic data interchange (EDI)” (IBS Center for Management
Research, 2006).
Jones & Clarke (2002) identified that much of this was based on lessons learned
from Toyota, the Japanese car manufacturer. With its ‘just-in-time’ initiative, Toyota
had pioneered methods of dramatically reducing its stockholding of parts and
reducing the lead time in securing them from its suppliers.
The most significant of Tesco’s supply chain initiatives was the establishment of
regional distribution centres (RDC). “Supply chain management was re-aligned to
ensure that these distribution centres around the country more closely matched the
requirements of the retail stores” (Birmingham City Council Business
Transformation Case Study, 2007). Where Tesco led, other supermarkets followed.
In effect, this “marked the removal of manufacturers and suppliers from controlling
the supply chain” … “and reinforced the switch of power to the retail end of the
channel. This period of centralization enabled retailers to reduce lead times,
minimize inventory and give greater product availability to customers in their stores”
(Sparks, 2010).
The supermarkets then took on “other responsibilities that were once the sole
domain of the manufacturer e.g. product development, packing logistics, branding
and advertising” (Sparks, 2010).
This supply chain model proved to be highly effective, not just for supermarket
chains and their customers. It was adopted by retailers from other business sectors
in the UK and overseas, notably the electronics giant, Best Buy in the United States
(Best Buy, 2007).
Tesco continued to be the market innovator in refining its supply chain model. It
established an analytics department staffed largely by science and engineering
graduates, who were then trained in retail expertise and programming skills. By
applying sophisticated analysis to its supply chain, it was able to save millions by
“allowing it to plan stock better, cut waste, optimise promotions and match stock to
fluctuations in demand” (The Operational Research Society, 2014).
In another innovation to improve quality standards, Tesco began to monitor its
supply chain performance through its ‘steering wheel’ approach. “Distribution

17. 11
centres are assessed on their operations (safety and efficiency), people
(appointment, development, commitment and values), finance (stock results,
operating costs) and customer satisfaction (accuracy, delivery on time) (CIPS,
2014).
Jones & Clarke (2002), writing in their predictive study of 2002: ‘Creating a
customer-driven supply chain’ focused on two areas of Tesco’s supply chain
development:
1) In a landmark study into the traditional value stream (Figure 2.3), they
discovered that it took 319 days for a can of cola to travel through the
company’s supply chain, in which only 2 hours was actually spent making
and filling the can. This led to the creation of compressed value streams
(Figure 2.4) that flowed more efficiently, and introduced the concept of lean
thinking “in which every aspect of the value stream has been rethought from
scratch”. Jones & Clarke (2002) envisaged “a ‘right-sized’ store, close to the
customer’s home...that carries a customised range of fresh and fast-moving
products and can obtain anything from the complete range of slow-moving
products from the RDC or local superstore to order within a few hours”.
2) They also foresaw, as described by Fernie and Sparks (2004), “a variety of
scenarios for grocery supply chains. All have at their heart a move away
from the current system of bigger, centralised and dispersed, to a model of
faster, simpler and local”. These would be customer-driven supply chains,
which above all, would be “aligned with the demand patterns of consumers”.

18. 12
Figure 2.3: Traditional Value Stream model (Jones and Clarke, 2002)
Figure 2.4: Compressed Value Stream model (Jones and Clarke, 2002)
2.3.2 Aldi & Lidl: The German Discount Model
“A discount store is a retailer that competes on the basis of low prices, high
turnover, and high volume” (Lamb et al, 2011).

19. 13
“They focus on a small selection of items, moderate hours of operation (compared
with other supermarkets), few services, and limited manufacture brands” (Berman
and Evans, 2009).
The impact of the world’s two pre-eminent discount
grocery chains, Aldi and Lidl, on the traditional UK
supermarket business has been unprecedented
(Figures 2.5 & 2.6). Aldi and Lidl’s discount models
enable them to offer good quality products at
extremely low prices. They operate out of relatively
small stores (on average 1,250sq/m), with limited
product lines (1,500) and few staff (35). It has led to a
fierce price war and struggle for market share. To stay
competitive, all the traditional UK supermarkets have
had to lower their prices, but leaders Tesco, Morrisons and Asda continue to lose
market share to these ‘discounters’ (Business Insider, 2015).
At the heart of Aldi and Lidl’s discount models are their
own-brand goods, which make up 90% of what they
sell.
“Discounters can offer great value because they have
worked closely with food manufacturers for decades.
They control how their products are produced, who
can produce them and what trade-offs to make”. With
businesses in several countries, they have the
advantage “of working with regional manufacturers who are artisanal experts, e.g.
pasta from Italy, which they can sell with great provenance across their entire
estate”. It has made Aldi and Lidl “the number one and number two sellers of own-
brand grocery products worldwide” (Oliver Wyman Report, 2015).
A further aspect of their discount model is the relentless pursuit of efficiency at
every level of the business to drive down costs and maintain quality. Cox and
Brittain (2004) have written of the following characteristics: low gross margins, high
degrees of self-service, low-cost store fittings, stores located in cheaper rent areas
and no home deliveries.
Both Aldi and Lidl are skilful in adapting their working model to local needs and
tastes. “In Switzerland there is a big focus on local provenance of fruit and
Figure 2.5: Aldi Logo
Figure 2.6: Lidl Logo

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vegetables – while in the US stores are a bit bigger, with more stock keeping units
(SKUs), but still fundamentally stick to the core business principles” (Berner, 2014).
In the UK, both ‘discounters’ lay great emphasis on their support for locally sourced
farm produce, claiming 40% of their overall product ranges come from Britain. The
discount supermarket chains are capitalising on what consumers want, according to
Jonathan Neale, the joint managing director of buying at Aldi UK:
“We’re seeing a permanent, structural change in the shopping habits of UK
consumers. They now know they can get all the products they want at significantly
cheaper prices than at other supermarkets” (This Is Money, 2016).
“Our only consideration when we
are working out a product’s price is
how cheaply we can sell it” – Karl
Albrecht, Aldi co-founder (Figure
2.7).
Aldi plan on opening 80 new stores in 2016 in the UK, 23 percent more than the
previous year (Marketing Magazine, 2016). This will be its fastest ever rate of
growth in the UK.
2.4 Ethics
Ethics can be defined as “a branch of philosophy that deals with thinking about
morality, moral problems, and judgements of proper conduct” (Frankena, 1973).
“Ethics is a systematic approach to understanding, analysing, and distinguishing
matters of right and wrong, good and bad, and admirable and deplorable, as they
relate to the well-being of, and the relationships among, sentient beings” (Rich,
2011).
2.5 Business Ethics
The history of business ethics goes back as far as both ethics and business.
However, it was the Greek philosopher, Aristotle, who gave the first recorded
definition of ethics in business, when he wrote of justice and fair treatment of all
parties in a transaction (Ferrell and Ferrell, 2008). Ethical behaviour in commercial
Figure 2.7: Karl Albrecht, Co-Founder of Aldi

21. 15
transactions has been variously defined through the ages by philosophers, such as,
John Locke (1690), famous for his treatise on the justification for private property
ownership, Adam Smith in his Theory of Moral Sentiments (1759) and John Stuart
Mill’s Principles of Political Economy Theory (1848).
However, it was not until the 1970s that the specific term ‘business ethics’ first came
into widespread use, initially in the United States and then in Europe and Japan. “It
represents the widely-held belief that ethics applies in business just as it applies in
all areas of life. The scandals about bribery, insider trading, false advertising and
the like…constitute what is generally regarded as misconduct in business and what
the general public associates with business ethics – or more precisely, with the
failure of business to act ethically. The moral norms that are violated apply to all
sections of society” (De George, 2011).
2.6 Business Ethics of UK Supermarkets
The UK supermarket industry is one of the most established and competitive in the
world. In their codes of practice, they all state their adherence to high ethical
standards in terms of their supply chain networks and their treatment of workers.
Tesco, Sainsbury’s, Asda, the Co-op and Marks & Spencer are all members of the
Ethical Trading Initiative (ETI) (Figure 2.8).
The ETI is a UK-based organisation which was
set up in 1998, establishing a code of practice
for its members that supports ethical trading in
their UK and global supply chains and commits
them to providing safe and fair conditions of
employment for their workers. It is also
intended to assure customers that their food is
produced and sourced ethically.
In Tesco’s Code of Business Conduct Report 2015, they state:
“We use the Ethical Trading Initiative (ETI) Base Code as a mechanism to promote
better and more consistent global standards. Our customers expect that we will only
work with suppliers who share our Values and treat their people the right way.
Decent working conditions are important to people everywhere, even in developed
countries” (Tesco’s Code of Business Conduct Report, 2015)
Figure 2.8: (ETI) – Ethical Trading
Initiative

22. 16
All ten major supermarkets in the UK are also
governed by The Groceries Supply Code of
Practice (GSCOP) which was first introduced
in 2009 (Figure 2.9). Its legally binding codes
were designed to regulate the relationship
between the supermarkets and their suppliers
with the power to arbitrate, investigate and
fine any retailer who fails to comply with those
codes (Gowling WLG, 2013).
In supporting the GSCOP, Sainsbury’s also has its own Code of Conduct for Ethical
Trade, in which it states:
“Sainsbury’s are conscious of the responsibility we share with our suppliers to
further the rights of workers who produce the goods we sell…we seek to develop
long-term partnerships with suppliers who share our values and who are prepared
to commit themselves to our Code of Conduct for Ethical Trade” (Sainsbury’s Code
of Conduct for Ethical Trade, 2013).
2.7 Business Ethical Standards
For the past 30 years, UK supermarkets have been under pressure from a variety of
powerful environmental and social groups to improve their ethical standards in all
the key areas of their operations relating to: supply chains, workers’ rights,
sustainable sourcing, animal welfare and environmental issues.
“The holy grail for social and environmental campaigners is markets where
companies try to compete against each other on ethics as well as price…
Successive reviews of UK supermarkets have revealed increasingly sophisticated
management and reporting systems operating around social and environmental
impacts” (Ethical Consumer, 2014).
2.8 Ethical Policies in Business
There have been successes large and small, according to Ethical Consumer, the
non-profit UK magazine which, since 1989, has published information on the social,
ethical and environmental behaviour of the major UK supermarkets.
Figure 2.9: (GSCOP) - The Groceries
Supply Code of Practice

23. 17
1) Sainsbury’s has been a world leader in the
Fairtrade movement since 1994, in which
farmers are guaranteed a better deal on their
produce (Figure 2.10). It began with bananas
and now extends to hundreds of basic food
products. “Fairtrade offers consumers a powerful
way to reduce poverty through their everyday
shopping” (Fairtrade International, 2011).
2) Marks & Spencer, Tesco and the Co-op are consistently praised for their
recycling, plastic bag policies, food redistribution schemes and reduction of
waste to landfill. (The Guide to Sustainable Spending, 2013).
3) Waitrose and Marks & Spencer have made strong commitments to animal
welfare issues such as free-range eggs, a ban on animal testing and
hormone-free products. “These companies demonstrate the strongest
commitments to farm animal welfare and have developed management
systems and processes” (Business Benchmark on Farm Animal Welfare,
2016).
4) All the major British supermarkets are
signatories to the Roundtable for Sustainable
Palm Oil (RSPO), which helps tackle the
problem of deforestation in Asia and Africa and
sets environmental standards and criteria for
the production of palm oil. (Roundtable for
Sustainable Oil, 2016) (Figure 2.11).
Figure 2.10: Fairtrade
International
Figure 2.11: (RSPO) –
Roundtable for Sustainable
Palm Oil

24. 18
2.9 Unethical Business Practices
Despite these achievements, the UK supermarkets score very poorly in most areas
of ethical behaviour. Based on environmental
efficiency, animal rights, workers’ rights, product
sustainability and financial practices, the Ethical
Consumer organisation, in its 2016 review of
ethical practices, placed the Co-op supermarket
chain at the top of their score table with a 5.5
rating out of a possible 20. Marks & Spencer
followed closely behind. At the bottom of the
table was Asda, making it the least ethical
supermarket in the UK, with a rating of 0.5,
closely followed by the German discounter Lidl,
with a score of 1.5 (Retail Gazette, 2016)
(Figure 2.12).
2.9.1 Discounter’s Ethical Issues
Both German discounters, Lidl and Aldi, are businesses with a weak commitment to
addressing ethical issues. It is argued that their aggressive pricing and rapid growth
at the expense of the UK supermarkets, who are fighting to maintain their market
share, is leading to a lowering in ethical standards right across the industry.
In April 2016, Lidl came under
widespread criticism for the
heavily advertised jeans they
were selling for £5.99, made in
Bangladesh. It was calculated
the garment workers making the
jeans were being paid less than
10p per pair. They were
accused of worker exploitation
(Figure 2.13). “When your
business model is based on offering the lowest possible prices, someone has to
subsidise that, and that someone is the worker stitching those jeans” (The
Guardian, 2016).
Figure 2.12: Ethical Consumer’s 2016
Review of Ethical Practices
Figure 2.13: Bangladeshi garment workers stitching Lidl
jeans Source: Ethical Consumer (2016)

25. 19
2.9.2 EU Working Conditions
Three of the UK supermarkets who claim to have some of the highest ethical
standards in the industry are not above criticism. In 2015, a Channel 4 television
documentary revealed the deplorable working conditions of certain migrant workers
in southern Spain who produce and supply vegetables and salads for Waitrose,
Marks & Spencer and Sainsbury’s. It was discovered workers were frequently
exposed to dangerous pesticides in the course of their labours. One of the
accusations raised in the programme was that competition in the UK, sparked by
Aldi and Lidl’s low prices, had led these supermarkets to engage in exploitative
practices in a bid to slash the cost of their produce. (Channel 4, 2015).
British MP’s described the evidence uncovered by Channel 4 as “appalling” and that
it revealed “slave labour” working conditions in the supply chains of these major UK
supermarkets (Reuters, 2015).
2.9.3 Modern Day Slavery
One of the worst examples of human exploitation in the UK supermarket supply
chain has been exposed in Thailand, which is the world’s largest shrimp and prawn
provider, with an annual £4.6 billion seafood export industry (The Guardian, 2015).
One of its largest and most powerful companies is CP Foods, who describe
themselves as “the kitchen of the world”. They supply Tesco, Morrisons, Aldi and
the Co-op with frozen and cooked shrimps, as well as ready meals.
Extensive investigations by The Guardian have exposed CP’s unacceptable
practices, which include so-called ‘slave ships’ where many workers are held
captive in horrific conditions and made to work excessively long hours.
In 2000, the United Nations made such activities
illegal by creating the UN’s Global Compact, to
curb unethical behaviour worldwide (Figure 2.14).
Its main principles include human rights, labour
rights, environment and anti-corruption
(Parboteeah and Cullen, 2013). Despite such a
powerful initiative, local Thai authorities seem
powerless to intervene.Figure 2.14: United Nations
Global Compact

26. 20
“If you buy prawns or shrimp from
Thailand, you will be buying the produce
of slave labour” states Aidan McQuade,
Director of Anti-Slavery International
(The Guardian, 2014) (Figure 2.15).
All the named UK supermarkets
involved in this trade agreed that eradicating such practices in their supply chains
was challenging and required a concerted effort on the part of everyone to bring it to
an end. In the harsh world of supermarket competition, their response illustrates the
constant tension that exists between being ethically responsible and remaining
commercially competitive.
2.9.4 Exploitation of Migrant Workers in the UK
There is evidence of unethical business practices closer to home. The UK’s first
Anti-Slavery Commissioner, Kevin Hyland,
has spoken of ‘extremely’ shocking
exploitation in the British agricultural
products supply chain which he has
witnessed in food plants in Lincolnshire,
Cambridgeshire, West Yorkshire and the far
north of Scotland (Figure 2.16).
Many immigrants working as pickers and factory
workers, have poor language skills and are
ignorant of labour laws. Gangmasters and
criminals take advantage of this. There is a
Gangmasters’ Licensing Authority (the GLA) -
created in 2005 to protect migrant workers from
exploitation (Figure 2.17). Because of austerity
cuts in its £4.3m budget, it has been ineffective in
bringing transgressors to justice.
Locked in their price wars, supermarkets place ever greater pressure on the farmers
to meet their changing demands and to supply produce at the lowest possible price.
Figure 2.17: (GLA) – The
Gangmasters’ Licensing Authority
Figure 2.15: Aidan McQuade, Director of Anti-
Slavery International
Figure 2.16: Kevin Hyland, Anti-Slavery
Commissioner

27. 21
This in turn puts greater strain on the low paid, largely immigrant workforce
(Financial Times, 2015).

28. 22
3.0 Methodology
3.1 Introduction to the Methodology
Figure 3.1: ‘The Research Onion’ model (Saunders et al, 2009)
The research design is aimed at meeting objective (2): to identify current key issues
within the UK supermarket business that are affecting those ethical policies and
objective (3): to compare the major supermarkets by exploring how effective and
ethical their individual supply chain models are.
The outmost layer of ‘The Research Onion’, which is not included (in Figure 3.1) has
three main categories: ontology, epistemology and axiology. These are the three
different approaches to the research philosophy. This dissertation took an
epistemological approach, as the researcher was seeking to establish individuals’
knowledge and understanding of UK supermarket supply chains and their ethical

29. 23
dimensions. “Epistemology concerns what constitutes acceptable knowledge in a
field of study” (Saunders et al, 2012).
3.2 Research Philosophy
There are four main approaches to the research philosophy: positivism,
interpretivism, pragmatism and realism (Saunders et al, 2012).
This study will focus on interpretivism in relation to the research method of
epistemology (Figure 3.2).
Figure 3.2: Comparison of the research philosophies (Saunders et al, 2012)
Interpretivists understand the world from a point of view that allows different
interpretations which are subjective. Saunders et al (2012) states, “It is necessary
for the researcher to understand differences between humans in our role as social
actors”. In the social world, it is argued that “individuals and groups make sense of
situations based upon their individual experiences, memories and expectations”
(Flowers, 2009).
Additionally, Pasian (2015) adds that interpretivism “holds the view that observation
cannot be pure in the sense of altogether excluding the interests and values of
individuals”.
However, Mack (2010), criticises interpretivism, “for producing findings which lack
reliability. This criticism takes credence from its inherent subjectivity…by selecting
your paradigm, you are being subjectively oriented towards one way of doing
research”.

30. 24
3.3 Research Approach
Saunders et al (2012), state there are two research approaches: deductive and
inductive (Figure 3.3). According to Ketokivi and Mantene (2010), deductive
reasoning “occurs when the conclusion is derived logically from a set of premises,
the conclusion being true when all the premises are true”. This is in contrast to
inductive reasoning where, “there is a gap in the logic argument between the
conclusion and premises observed, the conclusion being ‘judged’ to be supported
by the observations made” (Ketokivi and Matene, 2010).
Figure 3.3: Deductive & inductive:from reason to research adapted from (Saunders et al, 2012)
The deductive approach was selected for this study, as it best suited the
interpretivism philosophy (Figure 3.4). Bryman and Bell (2015) define deductive
theory as, “the most common view of the relationship between theory and research”.
Figure 3.4: The process of deduction adapted from (Bryman, 2004)

31. 25
3.4 Strategy
The research strategy used a quantitative method. “Quantitative research is
essentially about collecting numerical data to explain a particular phenomenon,
particular questions seem immediately suited to being answered using quantitative
methods” (Sukamolson, 2005). Saunders et al (2012) state that quantitative
research “is normally conducted through the use of a questionnaire or structured
interviews”.
3.5 Research Design
Parahoo (2014) defines research design as, “a plan that describes how, when and
where data is to be collected and analysed”.
This study was exploratory in nature, as it relates to interpretivism and focused on
primary research conducted in the form of an online questionnaire. “An exploratory
study is a valuable means to ask open questions, to discover what is happening and
gain insights about a topic of interest” (Saunders et al, 2012).
The use of an online questionnaire in this study allowed the researcher to establish
what a sampling of over 50 consumers, who shop in UK supermarkets, know about
the industry. It determined their views on the supermarkets’ management of their
respective supply chains and their ethical behaviour. The questionnaire also
gathered detailed information about these same consumers’ shopping habits,
choices and preferences.
DeVaus (2002) defines questionnaires as, “techniques of data collection in which
each person is asked to respond to the same set of questions in a predetermined
order”.
According to Saunders et al (2012), questionnaires differ, based on delivery and the
amount of contact you have with the respondents (Figure 3.5). For the purposes of
this dissertation, the researcher chose a web-based questionnaire as the most
effective means of engaging as large a number of respondents as possible, within
the time constraints imposed by the project.

32. 26
Figure 3.5: Types of questionnaire (Saunders et al, 2012)
3.6 Questionnaire Design
This questionnaire (Figure 3.6), focused on two main research objectives:
Objective (2): to identify current key issues within the UK supermarket business that
is affecting ethical policies.
Objective (3): to compare the major supermarkets by exploring how effective and
ethical their individual supply chain models are.
Figure 3.6: Questionnaire Design

33. 27
3.7 Data Collection
Collecting data, via an online quantitative questionnaire, was considered the most
effective means of analysing respondents’ views on ethics and the part they play in
the UK’s supermarket supply chains.
Wheaten and Granello (2004) state that “there are several methods for collecting
data online. The two most common are e-mail surveys and Web-based surveys”.
Participants will give more honest answers to a computer or via an email response
than to a person or paper questionnaire (Phellas et al, 2012).
Garton et al (1997) adds, that online questionnaires, “take advantage of the ability of
the internet to provide access to groups and individuals who would be difficult, if not
impossible, to reach through other channels”.
Dillman et al (2008) argues that, “internet browsers and display screens can all
result in the image being displayed differently, emphasising the need to ensure the
questionnaire design is clear”.
When designing an individual questionnaire, researchers should do one of three
things:
1) “adopt questions used in other questionnaires”
2) “adapt questions used in other questionnaires”
3) “develop their own questions” (Bourque and Clark, 1992).
For the purposes of this study, the researcher chose option three, with nineteen
original questions. These were based on the extensive reading and detailed research
requirements surrounding the central issues of this dissertation.
Most questionnaires include a combination of open and closed questions (Saunders
et al, 2012). Open questions, also “referred to as ‘open ended’, allow respondents to
give answers their own way” (Fink, 2009). Closed questions, “provide a number of
alternative answers from which the respondent is instructed to choose” (Fink, 2009).
This study used the latter. It was decided that the ‘closed question’ approach best
met the criteria of this particular investigation. Responses are “easier to compare as
they have been predetermined” (Saunders et al, 2012) and ‘close-ended’ questions
“limit the respondent to the set of alternatives being offered” (Foddy,1994).

34. 28
3.8 Sampling
Saunders et al (2012) states that, “sampling saves time, an important consideration
when you have a tight deadline”.
There are two types of sampling technique: probability and non-probability (Saunders
et al, 2012). This study focused on non-probability sampling (also known as non-
random sampling). This form of sampling “provides a range of alternative techniques
to select samples, the majority of which include an element of subjective judgement”
(Saunders et al, 2012). Lynch (2011), adds that non-probability sampling techniques,
“aim to construct a sample that can generate the most useful insights that can be
gained by the researcher into that study’s particular focus”.
This researcher used the haphazard sampling method, (also known as convenience
sampling), for its simplicity and effectiveness (Saunders et al, 2012). This is an
approach that has been widely used in Facebook polls.
3.9 Data Analysis
This study used SurveyMonkey to help create a high quality, online questionnaire.
This online survey system then analysed the subsequent data supplied by the
respondents and produced graphs and pie-charts, which were then exported to
Microsoft Excel.

35. 29
4.0 Findings and Analysis
4.1 Introduction to Findings and Analysis
The primary data aims to reach objective (2) & objective (3) and to support the
secondary data themes from the literature review objective (1) (see Chapter 2.0).
Objective (2): to identify current key issues within the UK supermarket business that
is affecting those ethical policies.
Objective (3): to compare the major supermarkets by exploring how effective and
ethical their individual supply chain models are.
4.2 Online Questionnaire Findings
4.2.1 Question 1 & 2 – Respondent Demographics
Figure 4.1: Question 1 Findings
Question 1 and Question 2 aimed to find out the demographics of the respondents.
59%
25%
6%
2%
8%
0% 0%
Q1 - What is your age?
18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 or older

36. 30
For Question 1 (Figure 4.1), the majority of the respondents were between the ages
of 18 to 24 (59%). This was due, in great part, to the researcher using his personal
Facebook account in order to carry out this survey, which resulted in a limited cross
section of participants consisting mainly of students living in different parts of the
UK.
However, Smith (2008), states that in general “more educated and more affluent
people are likely to participate in surveys than less educated and less affluent
people” and adds that “younger people are more likely to participate than older
people”.
Question 2 (Figure 4.2) found that out of the 51 respondents, only 44% of females
responded to the online questionnaire compared to that of 56% of males.
Figure 4.2: Question 2 Findings
44%
56%
Q2 - What is your gender?
Female Male

37. 31
4.2.2 Questions 3 - 8 – Consumer Buying Behaviour
Questions 3 to 8 focus on the consumer preferences and decision- making
processes of the respondents in this survey, in relation to their supermarkets of
choice and their purchases.
Figure 4.3: Question 3 Findings
Question 3 (Figure 4.3): The majority of respondents (49%) showed a preference for
a twice weekly shop, as opposed to the traditional single ‘big shop’, which was
supported by 25% of those questioned. 18% of respondents preferred to shop daily,
reflecting a growing trend for supporting small convenience stores in the high street,
with a limited product range. Many of those stores have been created by the
mainstream supermarkets, carrying such names as Tesco Express, Sainsbury’s
Local, Little Waitrose and M&S Simply Food. It is their response to the ‘top up’
concept of shopping where consumers buy only for their immediate needs. Further
evidence of this trend is shown in recent action taken by the Co-op chain. It plans to
axe 300 of its larger stores and focus on expanding its more profitable, core
convenience businesses where sales are up by 3.8%. “The Co-op opened 97 new
convenience stores in 2015 and refitted a further 264, with plans to open another
100 convenience stores and refit 150 in 2016” (City A.M., 2016).
18%
49%
25%
6%
2%
Q3 - How frequently do you visit a UK
supermarket?
Daily Twice a week Weekly Every fortnight Never

38. 32
Q4 - T ick the supermarkets you visit.
Figure 4.4: Question 4 Findings
The respondents answers to Question 4 (Figure 4.4) give support to the general
trends in supermarket shopping. Tesco, with its huge number of stores - 3,520, of
which 2,500 are convenience stores, remains the market leader, despite its recent
financial mis-steps. 78.4% of those questioned still shop there. Their answers to the
questionnaire also reflect the market in-roads made by the German discounters Aldi
and Lidl, with almost half of the respondents shopping at Aldi (49%), closely
followed by Lidl (39.2%).
78.4%
64.7%
39.2%
25.5%
39.2%
49.0%
15.7%
19.6%
35.3%
17.6%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%

39. 33
Figure 4.5: Question 5 Findings
Question 5 (Figure 4.5): suggests there is still significant support for shopping at
large supermarkets with their multiplicity of choice. 39% of respondents indicated
this preference. Sainsbury’s, number two in the supermarket league behind Tesco,
still have a significant number of large stores. Out of its total portfolio of 1,312
outlets, 598 remain full-size supermarkets. However, a larger number of
respondents (53%) preferred the opportunity of shopping at large supermarkets as
well as the new style convenience stores.
Figure 4.6: Question 6 Findings
Large supermarket
39%
Convenience store
8%
Both
53%
Q5 - Do you prefer to visit a large
supermarket with an extensive range of
goods or one of the new-style convenience
stores with a more limited range of products?
Large supermarket Convenience store Both
34%
66%
Q6 - Have you shopped for groceries online in
the last 6 months?
Yes No

40. 34
Question 6 (Figure 4.6): shows that traditional shopping habits are changing, with a
third of respondents (34%), stating that they have bought groceries online in the last
six months. In a survey conducted by the Institute of Grocery Distribution (IGD) in
2015, “27% of British shoppers claim to shop online for their groceries monthly,
compared to 22% in 2010”. There is a close correlation between the answers given
by respondents in this survey in 2016 and the (IGD)’s findings in 2015. On current
estimates, the online grocery market is set to double in value by 2020 to £17.2bn
(IGD, 2015c).
Figure 4.7: Question 7 Findings
In Question 7 (Figure 4.7), almost half of the respondents (49%) stated that both
location and price were important factors in their choice of grocery store. Store
location (28%) came slightly ahead of price (23%) in deciding the individual
consumer’s choice.
Location
28%
Price
23%
Both
49%
Q7 - Is it location or price that motivates you
to purchase grocery items from a particular
store?
Location Price Both

41. 35
Figure 4.8: Question 8 Findings
Question 8 (Figure 4.8) below, showed that respondents were open minded about
their purchase decisions, with 43% opting to buy both own-brand and established
named goods. At the heart of Aldi and Lidl’s success are their own-brand goods,
which make up 90% of what they sell. It has made them “the number one and
number two sellers of own-brand grocery products worldwide” (Oliver Wyman
Report, 2015). With huge economies of scale, they are able to sell their products at
astonishingly low prices. 41% of respondents were happy to buy these own-brand
goods, while only 16% of respondents insisted on established named products. This
consumer acceptance of the Aldi and Lidl discount models explains, in great part,
their considerable commercial success.
41%
16%
43%
Q8 - Aldi & Lidl’s success is based in great part
on their own-brand goods which are cheaper
than the more expensive, established named
goods, which they copy. Which would you prefer
to buy?
Own-brand goods More expensive, established named goods Both

42. 36
4.2.3 Questions 9 – 15 – Consumer Ethical Perceptions
Questions 9 to 15: They focus on the consumer’s perceptions of ethics in relation to
UK supermarkets.
Figure 4.9: Question 9 Findings
Question 9 (Figure 4.9) indicated a division of opinion amongst respondents in their
consideration of the relationship between supermarkets and their suppliers. A
significant 41% gave a definitive ‘No’, but a third of those questioned - 33%, gave a
positive response to the question, with some support - 26%, from the less
committed. Overall, this would suggest a growing interest in this issue on the part of
respondents.
Further indication of the above trend (Figure 4.9), is found in the respondents’
answers to Question 10 (Figure 4.10) below, in which two-thirds of those questioned
– 67%, expressed an awareness of unethical practices perpetrated by the
supermarkets on their suppliers.
Yes
33%
No
41%
Sometimes
26%
Q9 - Do you ever consider the relationship
between the supermarket where you shop
and their suppliers?
Yes No Sometimes

43. 37
Figure 4.10: Question 10 Findings
However, in response to Question 11 (Figure 4.11) below, it would seem awareness
of such malpractices does not necessarily translate into direct action by consumers,
in the form of boycotting supermarkets who behave unethically. An ambivalent 61%
- almost two- thirds of those questioned - were open to such a suggestion, but
reserved judgement, or perhaps would be hesitant in taking such action.
Figure 4.11: Question 11 Findings
Yes
67%
No
33%
Q10 - Have you ever heard of any unethical
practices perpetrated by the supermarkets in
their relationship with their suppliers?
Yes No
Yes,
definately
33%
Maybe
61%
No
6%
Q11 - Would you boycott a UK supermarket if
you believed it was behaving unethically?
Yes, definately Maybe No

44. 38
Figure 4.12: Question 12 Findings
Question 12 (Figure 4.12): Over 50% of the respondents regard themselves as
being ethical consumers. This is consistent with their responses to Question 9 (see
Figure 4.9) - in which they showed awareness of the sometimes troubled
relationships between the supermarkets and their suppliers, and Question 10 (see
Figure 4.10) – in which respondents showed knowledge of unethical practices
committed by the supermarkets in their relationship with their suppliers.
27%
55%
18%
Q12 - Do you consider yourself to be an ethical
consumer?
Yes Sometimes No

45. 39
Figure 4.13: Question 13 Findings
This is further evidenced in the respondents’ answers to Question 13 (Figure 4.13)
in which they were asked about their purchasing habits in relation to ethically and
organically sourced products. They scored highly in these categories, with a
remarkable 92.2% of respondents having made Fairtrade purchases and 82.4%
having purchased organic products. These high scores may well have been
influenced by the fact that 64.7% of respondents had shopped at Sainsbury’s and
35.3% at the Co-op – two supermarkets that, historically, have laid a heavy
emphasis on ethically sourced products (see Figure 4.4). Sainsbury’s has been a
world leader in the Fairtrade movement since 1994, in which farmers are
guaranteed a better deal on their produce (as stated in Chapter 2.0). It began with
bananas and now extends to hundreds of basic food products. The Co-op has
always been in the forefront of good ethical practices. In its 2016 review, the Ethical
Consumer organisation placed the Co-op chain at the top of their score table (see
Chapter 2.9), based on environmental efficiency, animal rights, workers’ rights,
product sustainability and financial practices.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Fairtrade Organic Vegan Eco-friendly None
Q13 - HAVE YOU EVER PURCHASED ANY
OF THE FOLLOWING PRODUCTS:

46. 40
Q14 - Which UK supermarket do you consider to be the least ethical and most ethical?
Most ethical Least Ethical
Supermarket No. of respondents
1) Waitrose
2) The Co-op
3) Sainsbury’s
4) Aldi
5) Lidl
6) M&S
7) Morrisons
8) Tesco
9) Asda
10
9
4
3
3
2
2
2
1
Supermarket No. of respondents
1) Tesco
2) Asda
3) Lidl
4) Aldi
5) Morrisons
6) Waitrose
7) M&S
8) Sainsbury’s
15
7
7
3
2
2
1
1
36 respondents out of 51 answered this question 38 respondents out of 51 answered this question
Figure 4.14: Question 14 Findings
Question 14 (Figure 4.14): The respondents’ answers to the question of which UK
supermarkets do they consider to be the most ethical and least ethical, mirrors
many of the conclusions (but not all), of the Ethical Consumer’s annual score table
for 2016, which rates the ethical and environmental records for the eleven leading
UK supermarkets (see Figure 2.9). Both surveys place the Co-op at the top (or next
to the top in the case of the respondents), as being the most ethical supermarket.
Both agree on Asda’s position – at the bottom of the charts, with Lidl only slightly
above. In the case of Tesco, the respondents were more critical of the
supermarket’s record than the Ethical Consumer’s findings. 60.5% of the
respondents considered them to be the least ethical supermarket of all.

47. 41
Figure 4.15: Question 15 Findings
Question 15 (Figure 4.15): A fragmented response was received from those
questioned, regarding the major reasons for the intense competition between the
UK supermarkets. Two equally important factors were judged to be the recession
and the increase in online-shopping – 10% each. 37% of those polled, believed a
variety of factors had led to the intense competition between the supermarkets and
no single element was responsible.
However, the two most significant factors for creating the intense competition
between the UK supermarkets would seem to be the challenge from the German
discounters, Aldi and Lidl – (20% of respondents) and the changes in consumer
shopping habits – expressed in the growth of ‘convenience style’ shopping (23% of
respondents). Put together, they created a potent partnership of 43% of
respondents views.
10%
20%
23%10%
37%
Q15 - Which of the following do you think are the
major factors in the intense competition between
the UK supermarkets?
The recession Competition from Aldi & Lidl
Changes in consumer shopping habits Increase in online-shopping
All of them

48. 42
4.2.3 Questions 16 - 19 – Perceptions of Supply Chain Management
Questions 16 to 19 deal with the complex supply lines that exist between the
supermarkets and their suppliers, the ethical issues involved in these relationships
and the consumers’ awareness of abuses in the system.
Figure 4.16: Question 16 Findings
Question 16 (Figure 4.16): It has already been established in this questionnaire (see
Figure 4.9), that there is a significant interest in the relationship between the
supermarket and their suppliers (33% of those questioned). Knowledge of this
relationship is further reinforced by the response to the above question, where 42%
claimed an awareness of the extended and complex nature of the supply chains
between supermarket and supplier.
Yes
42%
No
58%
Q16 - Are you aware of how extended and
complex some of the UK supermarket supply
chains are?
Yes No

49. 43
Figure 4.17: Question 17 Findings
Question 17 (Figure 4.17): The widespread media attention given to the issue of the
mistreatment of workers in both national and international supermarkets’ supply
chains over the last 15 years has helped to increase public awareness of these
abuses. This would help explain why over half of those responding to this question
(53%), replied in the affirmative.
Q18 - Are you aware of these recent supply chain issues involving Tesco?
Answer Options
Response
Percent
Response
Count
Intentionally paying their suppliers late 19.6% 10
Intentionally deducting major sums from payments to suppliers 9.8% 5
Pressurizing British dairy farmers into supplying milk at an
unsustainably low price level
60.8% 31
Horsemeatscandal 78.4% 40
Misleading customers by putting fake farms on their products 29.4% 15
None 9.8% 5
Figure 4.18: Question 18 Findings
Question 18 (Figure 4.18): In this dissertation the power and success of Tesco has
been established, as well as some of its blatant abuses of that power. Over 60% of
the respondents in this survey believe them to be the least ethical of all British
supermarkets (see Figure 4.14). Two issues in Tesco’s recent history received the
highest negative rating in this survey – the horsemeat scandal (78.4%) and the low
Yes
53%
Maybe
41%
No
6%
Q17 - Do you think UK supermarkets are aware
of the mistreatment of workers’ involved in
some of their supply chains?
Yes Maybe No

50. 44
prices paid to British dairy farmers for their milk (60.8%) - despite the fact Tesco
were not alone in these abuses (see Chapter 1.3). The respondents – as
consumers - clearly felt most affected by these two subjects. In the poll they seem
less interested in the questionable morality of Tesco’s poor payment records with its
suppliers.
Figure 4.19: Question 19 Findings
Question 19 (Figure 4.19): Opinion was almost equally divided between those
respondents willing to pay more for their supermarket purchases, if it meant more
effective enforcement of the ethical rules governing supply chains (45%) and the
(49% of respondents) who were less committed. Overall, it would seem that
respondents were generally keen to establish their ethical credentials (see Figure
4.12), but were less enthusiastic when it came to paying for them.
Yes
45%
Maybe (depending
on the rules)
49%
No
6%
Q19 - Would you be in favour of greater
enforcement of the ethical rules governing
supermarket supply chains, if this meant an
increase in the price of the products you buy?
Yes Maybe (depending on the rules) No

51. 45
5.0 Conclusion and Recommendations
5.1 Objective One – To review current literature surrounding UK
supermarkets supply chain management in relation to ethics.
Reviewing the literature revealed a broad understanding of supply chain
management in relation to ethics.
The researcher explored the timeline of “supply chain management” and how it has
evolved over the years – starting with (Hugos 2006) stating the phrase was first
used in 1982 by Keith Oliver, to McKellar (2014) defining the term “supply chain” as
“a metaphor used to represent all the individual firms, their personnel, and the
physical infrastructure required to create and transport products to customers”.
The researcher looked at primary authors Jones and Clarke – who, in 2002,
produced a predictive study on Customer-driven supply chains, and authors Fernie
and Sparks’ journal entitled ‘Logistics and retail management: Insights into current
practice and trends’. Both works foresaw today’s grocery supply chains as “a move
away from the current system of bigger, centralised and dispersed, to a model of
faster, simpler and local” (Fernie and Sparks, 2004).
There have been two major resources for monitoring the social, ethical and
environmental behaviour of UK supermarkets – their successes and failures. The
Ethical Consumer Association, based in Manchester, has since 1989 published
regular reports and called for boycotts of companies deemed unethical by its
findings.
The Guardian newspaper, through several extensive investigations, has exposed
some of the worst examples of human exploitation within UK supermarket supply
chains – most notably the Thai shrimp and prawn industry (2015).

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5.2 Objective Two –To identify current key issues within the UK
supermarket business that is affecting those ethical policies.
In this dissertation, it has been shown that the UK supermarket industry, over the
past 30 years, has become one of the most established and competitive in the world
– yet despite its achievements, scores very poorly in most areas of ethical
behaviour.
There have been successes in the ethical arena, some of which have been
described earlier (see Chapter 2.8), but these advances are in danger of being
eroded by the price wars between the supermarkets and especially the German
discount stores, Aldi and Lidl. As Louise Valducci, of the Fairtrade Foundation
recently stated:
“As the price wars intensify, there is a risk that ethical commitments might be
reconsidered, or suppliers might be squeezed, in a race to sell at the cheapest
possible price” (Ethical Consumer, 2014).
One of the current key issues to be addressed is the means by which good ethical
practices can be protected and maintained in this highly competitive environment.
There is no shortage of legislation already in place to safeguard those practices.
Tesco, Sainsbury’s, Asda, the Co-op and Marks and Spencer are all members of
the ETI - Ethical Trading Initiative, which since 1998 has established a code of
conduct that supports ethical trading in their UK and global supply chains. Since
2009, all ten major supermarkets in the UK have been governed by GSCOP - the
government-backed Groceries Supply Code of Practice, which was designed to
regulate the relationship between the supermarkets and their suppliers. There is
also the GLA – the Gangmasters’ Licensing Authority, established in 2005, to
protect migrant workers in the UK from being exploited.
The central problem has been in policing the rules and regulations enshrined in
these initiatives.
“The GLA has struggled to cope with cuts in its £4.3m national budget… staff
numbers have dropped by more than a quarter… and the authority carried out only
three prosecutions in 2014” (Financial Times, 2015).
Much of the legislation has been strong on intent, but has lacked the powers of
regulatory enforcement. For example, in the recent GSCOP investigation led by its

53. 47
Adjudicator, Christine Tacon, into Tesco’s bullying tactics and unethical treatment of
its suppliers, her powers of punishment were limited to naming and shaming the
guilty parties and making recommendations for better compliance in the future.
However, in tough new government-backed legislation, the GCA can now fine a
supermarket up to 1% of its annual revenue for serious Code transgressions, which
if put into practice would be a powerful tool for ensuring better ethical behaviour in
the future (The Guardian, 2016).
In recent years, an increasingly significant role has been played by the UK’s
mainstream media, both press and television, in naming and shaming those
supermarkets that have failed to maintain high ethical standards in their supply
chains.
Two television chefs have been particularly
effective in creating public awareness of these
shortcomings. Hugh Fearnley-Whittingstall
has been in the forefront of exposing the
supermarkets’ poor ethical standards in
animal welfare, beginning in 2008, with his
successful television campaign against
battery-raised hens and the widespread sale
of eggs from caged birds (Figure 5.1). As a
result, Sainsbury’s became the first of the ‘Big
Four’ supermarkets in the UK to end the sale of battery caged hens – three years
before an EU-wide ban came into force.
More recently, celebrity television chef Jamie Oliver
(with co-host Jimmy Doherty), targeted the huge
wastage of fruit and vegetables produced by UK
farmers and rejected by the supermarkets (up to
40%) on the grounds that the public would only buy
perfect looking produce.
“When half a million people in the UK are relying on
food banks, this waste isn’t just bonkers – it’s
bordering on criminal” stated Doherty in the
programme. (Channel 4, 2015).
Figure 5.1: Television Chef, Hugh
Fearnley-Whittingstall
Figure 5.2: Television Chef, Jamie
Oliver

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Jamie Oliver challenged the Asda supermarket chain to encourage its customers to
buy perfectly edible produce - but with “knobbles and blemishes” – at a reduced
price. The ‘Wonky Fruit and Vegetable’ range was created. Asda saw an
“unprecedented” response to its ‘wonky veg’ boxes, selling the equivalent of 162
tonnes of such produce in two months, that under normal circumstances would have
gone into landfill or become animal feed.
Asda’s initiative has since been copied by its rivals. Tesco has launched its own
successful version of ‘wonky veg’ – ‘The Perfectly Imperfect’ range (Figure 5.3). It is
ironic that the two supermarkets that were rated the least ethical by respondents in
this dissertation’s questionnaire (see Figure 4.14), have received widespread praise
for these actions and in the process have improved their ethical standing.
5.3 Objective Three - To compare the major supermarkets by exploring
how effective and ethical their individual supply chain models are.
In this dissertation, it has been established that certain UK supermarkets, namely
Waitrose, the Co-op and Marks and Spencer have a more ethical track record than
the others. Although Tesco, as the UK’s biggest retailer, has received widespread
criticism in the media for unethical business practices, its smaller rivals are not
without guilt.
In January 2016, following an internal assessment, it was revealed that Waitrose
had been taking three times longer than Tesco to make payments to some of its
suppliers. The supermarket is now reforming its payment systems (International
Business Times, 2016).
The Co-op, which has traditionally boasted high ethical standards, found itself
embroiled (with other UK supermarkets), in the global shrimp supply chain scandal
(see Chapter 2.9.3).
Figure 5.3: Asda & Tesco’s ‘wonky veg’

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Marks and Spencer sullied its reputation in October 2015, when a Channel 4
investigative documentary exposed the shocking working conditions of Romanian
migrants packing apples in Kent for some of the UK’s biggest supermarkets – which
included M&S.
Each of these cases reflects problems intrinsic to the industry as a whole. Unethical
financial practices, between the supermarkets and their suppliers, built up over
many years; complex supply chains to distant places that are difficult to monitor;
and the perennial competition between the supermarkets to source products as
cheaply as possible.
These issues directly affect supermarket customers. Brand trust is everything. In an
increasingly consumer-led society, good ethical behaviour by supermarkets and
their suppliers is increasingly important. 55% of those questioned in this
dissertation’s survey regarded themselves as ethical consumers (see Figure 4.12).
“Consumers like discounts, but not ones that leave a bad taste in their
mouth…exploitation should not be the true cost of cheap food…consumers are just
as likely to avoid you if the ethics of your brand are bad” (Marketing Magazine,
2015).
Supermarkets are having to respond to the demands and standards of these new
ethical consumers for whom the source of their food and its quality is a first priority –
not the price. The sales of organic food are rising dramatically, with sales in the UK
reaching £1.7b in 2014. This trend was confirmed in this dissertation’s survey – a
high 82.4% of respondents had purchased organic goods (see Figure 4.13).
“Millenials, (18-35 year olds) represent the biggest growth in organic sales, and
most of these shoppers have only come into the market in the last five years” (Food
Navigator, 2016). Even Aldi are catering to these ethical shoppers, with their own
organic vegetables’ range.
5.4 Objective Four - To recommend an ethical approach for UK
supermarkets in order to build and maintain an improved relationship
with their suppliers.
1) In the light of the GCA’s investigation into Tesco’s heavily criticized
relationship with its suppliers, in the future, UK supermarkets need to pay
closer adherence to the Groceries Supply Code of Practice by paying
suppliers on time, not making arbitrary deductions from money owed for
goods delivered and by adopting a generally more open and collaborative

56. 50
approach in their dealings with suppliers. They need to be aware that any
breaches of the Code after April 2015, can for the first time, incur severe
financial penalties.
2) Greater efforts need to be made by the UK supermarket industry as a whole
to tackle known human abuses in the global supply chain system. The
exploitation of workers in the Thai prawn industry – described as ‘modern
day slavery’ - is a particularly shocking example and requires a more robust
response. A joint collaborative effort between British supermarkets, with
support from the (ETI) – the Ethical Trading Initiative and the United Nation’s
Global Compact (which undertakes to curb unethical behaviour worldwide),
could form a powerful international alliance for change.
3) All the UK supermarkets publish individual ethical statements, which
describe in detail their relationships with their suppliers. These should be
under constant review by the individual supermarkets to ensure they practice
what they preach. In the case of Tesco, their Code of Business Conduct
bore little relationship to the manner in which they treated many of their
suppliers. With the ethical consumer in the ascendant, honesty, trust and
transparency have become key factors in the relationship between
supermarket, supplier and consumer.
4) Supermarkets can strengthen their ethical credentials by building a closer
relationship between the supplier and the consumer. The origin of many
supermarket products in the supply chain remain anonymous or unidentified.
Aldi and Lidl’s own-brand goods rarely credit their source. By contrast,
Waitrose and the Co-op make efforts to ‘personalise’ many of their products.
They give a ‘face’, an identity to the supplier in the labelling or packaging of
many of their goods, thereby establishing a closer relationship between
producer and consumer.
5) Greater efforts need to be made by all the supermarkets in the UK to shorten
their supply chains and wherever possible, source products closer to home.
At the time of the horsemeat scandal, it was determined the longer the
supply chain, the greater the risk of malpractice. With shorter supply chains
things are less likely to go wrong.

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6) ’We’ve got commitments in our constitution to always do the right thing…we’ve
become even more concerned about environmental, sustainability and animal
welfare issues, and supporting the communities in which we trade and our
customers live’ – Mark Price, former Waitrose MD.
Waitrose has managed to grow its ethical business practices during tough
economic times – as well as its profits - by rolling out its green token
scheme, Community Matters and also the Waitrose Foundation, which helps
farming communities in Africa. Good ethical practices can make good
business sense.

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6.0 Critical Reflection
For further in-depth investigation into the issues raised in this dissertation the
following would be helpful:
 To enlarge the scope of the questionnaire, by widening the age range of
participants and by seeking responses from a more diverse number of media
platforms - not just Facebook. This would be a further means of validating
the current findings.
 Much of the literature dealing with the discount models of Aldi and Lidl is
only available in the German language. Given the significant challenge they
pose to the UK supermarket business and to wider ethical issues, it would
be helpful to have access to the insights that this body of German research
could bring to the subject.
 Google Scholar – which has a tantalisingly large number of research papers
on supply chain management, proved to be a frustrating resource tool. Most
of these documents are only available for a fee and can only prove their
worth (or otherwise) when downloaded.

59. 53
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