Investors have withdrawn a resolution slamming Tesco for its lack of action on obesity, after the supermarket announced a raft of new measures across stores in the UK and Europe.
ShareAction, which was planning to stage a revolt at next month’s Tesco annual meeting, said it had secured a further series of commitments for the UK’s biggest retailer, which meant the action was now being dropped.
In March, Tesco CEO Ken Murphy announced a new commitment from the supermarket to tackle obesity, including a new target for a major programme of reformulation which set the aim of 65% of total sales coming from products defined as healthy by the government’s nutrient profiling model.
It followed a warning in February from a coalition of institutional investors, including Robeco, JO Hambro, and one of Tesco’s own health charity partners, Guy’s & St Thomas’ Charity, along with more than 100 individual shareholders, that they would put a motion ahead of its AGM accusing Tesco of trailing behind other supermarkets in tackling obesity.
Today Tesco announced a further extension to the plans, which included new targets across its Booker operations as well as extending the targets set in the UK to Tesco’s operations in Central Europe.
It included a commitment to increase sales of plant-based meat alternatives by 300% by 2025 and to develop a plan to make own-brand products healthier through reformulation in Czech Republic, Slovakia and Hungary.
Booker’s commitment will see it set up an online portal to provide a recipe management, allergy and nutritional tool for business caterers; a commitment to accelerate the rollout of front-of-pack nutritional information on Booker’s retail products, consistent with the policy applied to Tesco products; and pledge to make Booker products healthier every time it reviews a product, as well as offering a healthier alternative in all key categories.
Tesco’s reaction to the move by shareholders has been seen as having possible major complications for the future of investor relations and signalling growing importance for objectives such as health.
“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,” said Sarah Bradbury, group quality director at Tesco.
“These new commitments will ensure 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, added: “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.”