Tesco has today upped its commitments to increasing the sales of healthier foods across its businesses, causing a group of shareholders to withdraw a health resolution ahead of the supermarket’s AGM.
In February, Robeco and JO Hambro Capital Management’s UK Dynamic Fund were among seven institutional investors managing more than £140bn in assets that filed the first ever health-based shareholder resolution at a FTSE 100 company.
Coordinated by ShareAction, and along with 101 retail investors, the coalition of investors called on Tesco, the UK’s largest food retailer, to set targets to increase the proportion of healthy products in its sales.
Then in March, Tesco said it will increase the proportion of its sales from healthier products to 65% by 2025 and will set out a strategy for how it will achieve this.
This was welcomed by co-filers. Jessica Attard, head of health at ShareAction, said: “Tesco’s new plans are an important recognition of the role supermarkets play in shaping our diets, at a time when our health has never been more critical. We look forward to continuing to work with Tesco, and to seeing other supermarkets and food manufacturers step up to this challenge.”
However, ShareAction said the plans Tesco had announced cover only its Tesco-branded UK stores and exclude other parts of its business, such as Budgens and Londis-branded convenience stores, which are owned by Tesco, through Booker, and its international operations.
It also wanted to see Tesco explain the definition of ‘healthier’ that it is using to categorise products.
Today, Tesco has committed to increase its sales of healthier food and drink products across all its group retail business, by setting out further actions to be applied to the Booker Group and its Central European operations, covering an additional £10bn in sales (20% of Tesco’s retail revenue), up from £42bn (80%) in March.
Sarah Bradbury, group quality director at Tesco, said: “We share the same goal as ShareAction to make it easier for our customers to eat more healthily, and we’re pleased to now broaden our public commitments to Booker and our Central Europe business.
“These new commitments will ensure that every customer – wherever and however they shop with us – will have even greater access to affordable, healthy and sustainable food. Our focus now is on delivering the plans that we’ve set out, and we will continue to engage with ShareAction and other stakeholders as we work to make Tesco the easiest place to shop for healthy food.”
Louisa Hodge, engagement manager at ShareAction, said: “Investors are recognizing the importance of health. They see the risks and opportunities supermarkets face, given their outsized role in shaping our diets. By filing a shareholder resolution, our investor coalition sent a strong message to Tesco and to other supermarkets that shifting sales toward healthier options is important.
“Tesco’s new ambition to support healthier diets through its UK and Central European stores, as well as through the Booker Group, is very welcome. We look forward to continuing to engage with Tesco as it implements these commitments and fully develops its plans beyond UK retail.”