As consumers become increasingly aware of CSR issues thanks to social networking and the internet, being perceived as ethical has never had a greater impact on the bottom line. Katy Askew suggests UK retailer Tesco should take a leaf out of Nestle’s book as it looks show consumers a friendlier face.
Reading Nestle’s live Twitter feed from its AGM this afternoon (18 April), the corporate image that the food colossus wants to project is clear: Nestle cares about the consumers who eat its food. Nestle cares about its employees. Nestle cares about the environment and water usage. Nestle cares about health and nutrition. Nestle cares.
“We can only be successful over time if we create value not just for our company, but also for society at large,” CEO Paul Bulcke insisted.
Nestle learnt the importance of communicating its ‘softer’ side the hard way. It was only a decade ago that the firm was facing widespread boycotts over allegations that it cynically got Third-World mothers hooked on free-samples of infant formula. When the free samples dried up (sometime after the mother’s own breast milk) and families were unable to afford formula, it was claimed the move contributed to the problem of infant malnutrition in deprived communities.
Fast-forward to today, and it must be said that Nestle has done a wonderful job of breaking down its image as an ‘evil empire’ and reinventing itself as a ‘gentle giant’. And, to be fair, it does back this rhetoric up with action. Only today, Nestle announced it is funding research to develop more environmentally friendly products. Its products in emerging markets are designed to meet the nutritional needs of the local population. It has thrown its weight behind water conservation and invested in aiding the development of Third-World farming communities. Nestle’s mantra appears to have become good business is good business.
Another corporate juggernaut that seems to be learning the importance of being liked the hard way is Tesco.
For years, the company has been able to bite its thumb at detractors who have been critical of Tesco’s ruthless efficiency, bulldozing of the competition and squeezing of suppliers. But, as Tesco has seen UK sales and profits flat line, it would seem that this hard-nosed image is coming home to roost. After all, nobody roots for the over-dog.
We saw the first signs that Tesco CEO Phil Clarke is hoping to breathe some warmth into Tesco’s image yesterday, when the group released its full-year results.
Tesco has dramatically increased the emphasis it places on ‘giving back to the community’ and highlighting its ‘good guy’ credentials.
This new focus was even evidenced in a document as dry as its financial results release. Up there on page one of the 35-page document, right under details about profits, sales and margins, was the news that Tesco donated GBP74.5m (US$119.6m) to charities and good causes in the year. The group also chose to flag that it was ranked “best retailer” in the Carbon Disclosure Project’s Global 500 Index. To put this in context, these bullet points were placed above details of the group’s GBP1bn UK turnaround plan.
Tesco has a lot of work ahead if it is going to reverse the common perception that paints the company as “GroTesco”, a heartless corporate machine that cares about nothing but the bottom line.
If the Nestle experience has anything to teach us, it is that this mountain is not insurmountable. However, any move to present itself in a more compassionate light must be backed by action or risk appearing insincere and duplicitous.