IFRS Foundation

Food Retailers & Distributors

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Current language: English
The Food Retailers & Distributors industry consists of entities engaged in wholesale and retail sales of food, beverage and agricultural products. Store formats include retail supermarkets, convenience stores, warehouse supermarkets, liquor stores, bakeries, natural food stores, specialty food stores, seafood stores and distribution centres. Entities may specialise in one type of store format or have facilities that contain many formats. Products typically are sourced worldwide and include fresh meat and produce, prepared foods, processed foods, baked goods, frozen and canned foods, non-alcoholic and alcoholic beverages, and a wide selection of household goods and personal care products. Food retailers also may produce or sell private-label products.

Relevant Issues (9 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Food Retailers & Distributors

GHG Emissions
  • Fleet Fuel Management

    Entities in the Food Retailers & Distributors industry own and operate vehicle fleets to deliver products between its distribution and retail locations. The fuel consumption of vehicle fleets is a significant industry expense, both in terms of operating costs and associated capital expenditures. Fossil fuel consumption can contribute to environmental impacts, including climate change and pollution. These environmental impacts may affect food retailers and distributors through regulatory exposure. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility and limit the carbon footprint associated with storage and transportation. Short-term capital expenditures in fuel-efficient fleets and more energy efficient technologies may be outweighed by long-term operational savings and decreased exposure to regulatory risks.
  • Air Emissions from Refrigeration

    Emissions of refrigeration chemicals from equipment used to store and display perishable foods pose unique regulatory risks for the Food Retailers & Distributors industry. International regulations on hydrochlorofluorocarbons (HCFCs) aim to mitigate damage by HCFCs to the earth’s ozone layer. Additionally, many common HCFCs and hydrofluorocarbons (HFCs) are highly potent greenhouse gases (GHGs), which increases the industry’s exposure to climate change-related regulations. Regulators can assess penalties on entities that violate emissions standards. Entities may be required to upgrade or replace equipment, making capital expenditures to reduce emissions or replace existing refrigerants with potentially costlier but less environmentally-damaging alternatives.
Energy Management
  • Energy Management

    Food retail and distribution facilities are typically more energy-intensive than other types of commercial spaces. These facilities use energy predominately for refrigeration, heating, ventilation and air conditioning (HVAC), as well as lighting. Entities in the industry generally purchase the majority of consumed electricity, while some are beginning to generate energy on-site or add renewable energy into their energy mix. Energy production and consumption contribute to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, impact the operations of food retailers and distributors. Entities that manage to increase energy efficiency and use alternative energy sources may increase profitability by reducing expenses and decreasing risk.
Waste & Hazardous Materials Management
  • Food Waste Management

    The Food Retailers & Distributors industry generates food waste at various stages of operation. Food waste includes edible or otherwise useful food that does not reach consumers, as well as foods that spoil or are damaged during transportation or stocking or while on store shelves. Food loss and waste represent loss of saleable merchandise for entities in the industry and more broadly, a loss of resources used in food production, which include land, water, labour, energy, and agricultural chemicals, as well as contribute to food insecurity. Additionally, food waste can generate greenhouse gas (GHG) emissions during landfill decomposition. Effective food waste management can present financial opportunities to reduce costs associated with inventory loss, as well as help improve food security by more efficiently diverting food resources to beneficial purposes.
Data Security
  • Data Security

    Through electronic payment transactions and the sharing of personal financial data, food retailers establish a relationship of trust with consumers. Data breaches can occur through breaches of the physical payment technology, called point-of-sales breaches, as well as through attacks on cybersecurity. Data breaches that result in the theft or loss of customers’ private data can undermine their trust in an entity’s ability to securely manage their private information. This loss of confidence could result in reduced number of customer visits, lower revenues, and a diminished brand value. Retailers with strong technological and managerial systems to avoid and respond to data breaches can position themselves favourably with customers and reduce potential litigation and costs associated with data breaches.
Product Quality & Safety
  • Food Safety

    Maintaining product quality and safety is crucial for the Food Retailers & Distributors industry, as contamination by pathogens, hazardous substances, or spoilage can present human health risks. Contamination can occur at any stage in the food value chain, including food production, processing, transportation, distribution, and retailing. While food retail entities may not be directly responsible for all food safety and recall incidents, they are involved in the process and may still experience financial ramifications, damage to brand value, lower revenues, and increased costs associated with recalls, lost inventory, or litigation. Measures to prevent spoilage and contamination include temperature control, frequent food inspection, and supplier selection.
Customer Welfare
  • Product Health & Nutrition

    Increasing consumer awareness of food content and nutritional value, and the impact these can have on health, is shaping the Food Retailers & Distributors industry’s competitive landscape. Demand for food products that are made with natural ingredients or that are certified to be organic, low-fat, low-sugar, or made without genetically modified organisms (GMOs) has driven industry growth in recent years. Although the links between consumer health and certain foods are not well established, consumers have nonetheless shown preferences for food categories that are perceived to be more healthful. Food retailers that recognise the risks and opportunities presented by consumers’ shifting preferences and adapt to consumer demands are better positioned to capture opportunities for additional revenue and market share.
Selling Practices & Product Labeling
  • Product Labelling & Marketing

    Communication with consumers through product labelling and marketing is an important facet of food retail. The accuracy and depth of information presented in food labelling is of growing importance to shoppers and regulators alike. It is especially relevant for the sale of private-label products manufactured for food retailers, given direct brand reputation impacts. To inform purchasing decisions, consumers today seek additional information about product ingredients, such as genetically modified organism (GMO) content, and other health and nutritional impacts. These issues can affect the competitive landscape of the industry, as entities may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labelling transparency. These factors can have an impact on retailers’ brand value and revenue growth. Additionally, regulations addressing the accurate labelling of products and their ingredients present the risk of penalties or litigation for food retail entities.
Labor Practices
  • Labour Practices

    The Food Retailers & Distributors industry employs many hourly workers. Low average wages in the industry, which help entities maintain low prices for products, may result in labour-related risks. Worker dissatisfaction with wages and benefits, combined with high unionisation rates, have led to employee strikes at major food retail entities, resulting in business disruption and reputational damage. Additionally, entities in the industry have been involved in gender and racial discrimination cases, sometimes resulting in costly financial settlements. Entities may benefit from taking a long-term perspective on managing workers, including their pay and benefits, in a way that protects the rights of workers and enhances their productivity while strengthening the entity’s reputation and brand value.
Supply Chain Management
  • Management of Environmental & Social Impacts in the Supply Chain

    Food retailers and distributors source merchandise from a wide range of manufacturers. These suppliers face a myriad of sustainability-related challenges that include resource conservation, water scarcity, animal welfare, fair labour practices and climate change. When poorly managed, these issues can affect the price and availability of food. Additionally, consumers increasingly are concerned with the production methods, origins and externalities associated with the foods they purchase, which may affect an entity’s reputation. Food retailers and distributors also can work with suppliers on packaging design to generate cost savings in transport, improve brand reputation and reduce environmental impact. Entities that can manage effectively product supply risks by assessing and engaging with suppliers, implementing sustainable sourcing guidelines and enhancing supply chain transparency positioned more advantageously to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.

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Current Industry: Food Retailers & Distributors

Food & Beverage
Consumer Goods
Extractives & Minerals Processing
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