“Promoting positive change throughout the industry to have an even greater impact for generations to come.” --Brian Cornell, chairman and CEO, Target
Target promotes positive change in the industry, yet its profit has grown throughout the pandemic and stores visits never dropped below 2% of 2019 levels2
Summary video (4:55m) about Chain Stores and COVID-19 (4:55m); Script below
Video Script
Hello my name is Gwen Crise and today I will be discussing how the COVID-19 pandemic has affected chain stores and consumers. As many of us have witnessed consumer habits have been altered greatly and these habitual changes have impacted the environment.
Chain stores, big box stores or retail giants are all names for the stores we seek out for everyday needs. Today I will be focusing on Target and Walmart since they have become the one-stop-shop in almost every American city. It is important to remember what drives these corporations' practices, politics, corporate strategy and consumer wants. These three drivers have been influencing retail stores since their invention. Though many corporations are advertising environmentally-friendly changes, it is usually a marketing attempt to persuade the eco-friendly buyer. This marketing scheme is called green-washing and becoming the norm in many businesses. Green-washing a product or a company means they are promoting environmentally friendly practices when in reality it is just a color change or some added symbols. In a short amount of time, our consumer habits have almost entirely switched to online-shopping. Retailers are becoming fully reliant on their e-commerce for business and expected to deliver faster than ever, which is harmful to the environment.
This quick clip from the Wall Street Journal shows the changes in grocery stores due to the pandemic.
Before the pandemic many retailers were already seeing their numbers fall because of e-commerce. Many malls were closing before 2020 and will continue to close. This had lead to less competition for one-stop-shops like Target and Walmart. The pandemic however has increased the amount of small local businesses shutting down, many variable are causing these shut-downs such as consumer expectations of faster delivery and the inability to have shoppers in-person which drives much of small retailers' business. Store like Target, Walmart and Costco also have the advantage of size. Social distancing regulations have not impacted these large retailers as much as specialty stores. Customers are willing to wait in long lines to enter the store and there is more space in the aisles for multiple customers at a time.
As e-commerce has risen so have the innovations in the sector. Thanks to Amazon, many consumers now expect same-day or 1-hour delivery services. These practices are environmentally harmful because consumers purchase less at a time and the delivery trucks have higher emission rates than cars. Consumers are more likely to purchase fewer things when buying online. This is due to the purchase-as-you-go mentality instead of anticipating their needs for the week. In the table above we see the emission rates for a car vs a delivery truck. It is clear to see the delivery truck expels more emissions per mile in every category.
Things seem bleak in the retail world, but corporations are attempting to turn a corner. Walmart outfitted 2 stores in the US with energy-saving mechanisms. They added solar panels, smart heating and cooling systems and LED lights to all refrigerator cases. These changes did make an impact on their carbon emissions, but they hoped for a greater decrease.
Changing corporations' habits is not easy, however when they are incentivized the change is more likely to stick. A study conducted in China showed company's and their supply chain were more likely to improve their emissions when the government incentivized them. I think this practice would be very beneficial in America and could lead to a healthier climate!
Introduction
Chain stores are influenced by politics, corporate strategies and consumer desires NOT customer well-being or the environment
COVID-19 changed consumer habits, leading to shopping on-line and stock-piling
Carbon emissions are increasing
2-hour delivery and same day delivery may be problematic for the environment
Green Washing- A term describing marketing that is used to deceptively label products as environmentally friendly
"Since 2001, Wal-Mart has paid settlement costs and civil penalties totaling more than $8 million resulting from federal Environmental Protection Agency storm water cases. This includes Wal-Mart's payment of $3.1 million in 2004 to settle Clean Water Act cases in 9 states."1
Current Status
Retailers from Fred Meyer to Amazon benefited greatly during this time of panic.
Stay at home orders made curb-side pick up or little to no cost delivery to homes the norm.
Delivery trucks and quick pick-ups made consumers order less and frequent the store more.
The differences of emissions by car and delivery truck are explained here. It is clear to see the delivery truck emits more pollutants. 5
Summary of Research
Big box stores/ chain retailer stores have been dominating the market for decades, now online retail is king.
Target has “reported the greatest percentage increase in quarterly sales in the company’s history”, yet has not offered a pay increase for employees for risking their health by interacting with the public.2
Target’s main competitor Walmart has reported double earnings from e-commerce.3
There is evidence that “social distancing can bring economic losses…[and] raise unemployment” however “social distancing measures that bring about reduced capacity in stores and lower expenditure, are seen as being necessary by the public”.4,5
E-commerce is the strong hold for large retailers with same-day or 1-hour delivery.
This practice is increasing the amount of carbon emissions the company emits.
Evaluating the environmental impacts of online shopping: A behavioral and transportation approach denotes more consumers are likely to purchase lump sums in person and small quantities when ordering on-line, increasing frequency of driving.
The consistent rise of e-commerce transactions brings more delivery vans that bring “increased congestion and pollution".5
Large stores are pledging to become more green in the future, however during these critical times they have illustrated how their profits are more important than lessening their environmental impact.
Solutions
Many big box stores have already pledged to reduce their greenhouse gases and are selling more “green” products.
Walmart’s experimental energy efficient stores improvements were minimal.
Two stores switching multiple variables to become more energy efficient and “gradually reduced over the monitoring period...the overall carbon dioxide (CO2 ) output for the experimental stores was lower than the comparison stores, but not as low as hoped for”.6
Government-led low carbon incentive model of the online shopping supply chain considering the O2 O model explain how the supply chain and the corporation have an incentive to improve their carbon emissions green initiatives are more likely to become the norm.7
References
Club, Sierra. “How Big Box Stores like Wal-Mart Effect the Environment and Communities.” Big Box Stores Sierra Club, 2010, www.sierraclub.org/sites/www.sierraclub.org/files/sce/mother-lode-chapter/Website/Big%20Box%20Stores_Sierra%20Club.pdf.
Friedman, G. (2020). Big-Box Retailers’ Profits Surge as Pandemic Marches On. The New York Times 4.
Greenstone, M., Nigam, V., 2020. Does Social Distancing Matter? University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-26. https://dx.doi.org/10.2139/ssrn.3561244.
Hollander, S. C., & Omura, G. S. (1989). Chain Store Developments And Their Political, Strategic, An. Journal of Retailing, 65(3), 299.
Jaller, M., & Pahwa, A. (2020). Evaluating the environmental impacts of online shopping: A behavioral and transportation approach. Transportation Research Part D: Transport and Environment, 80, 102223.
Laato, S., Islam, A. N., Farooq, A., & Dhir, A. (2020). Unusual purchasing behavior during the early stages of the COVID-19 pandemic: The stimulus-organism-response approach. Journal of Retailing and Consumer Services, 57, 102224.
McGregor, Alisdair, et al. Two Degrees: the Built Environment and Our Changing Climate, Taylor & Francis Group, 2012. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ohsu/detail.action?docID=1097818.
Micalizzi, L., Zambrotta, N. S., & Bernstein, M. H. (2020). Stockpiling in the time of COVID‐19. British journal of health psychology.
Ntounis, N., Mumford, C., Loroño-Leturiondo, M., Parker, C., & Still, K. (2020). How safe is it to shop? Estimating the amount of space needed to safely social distance in various retail environments. Safety Science, 132, 104985.
View, BullsEye. Target Just Announced Our Most Ambitious Climate Goals Yet, Target Corporate , 2019, corporate.target.com/article/2019/03/climate-goals.
Wu, Y., Lu, R., Yang, J., Wang, R., Xu, H., Jiang, C., & Xu, F. Government-led low carbon incentive model of the online shopping supply chain considering the O2O model. Journal of Cleaner Production, 279, 123271.
Wall Street Journal. (2020, July 10). Why The Coronavirus May Forever Change Grocery Shopping | WSJ [Video]. YouTube. https://www.youtube.com/watch?v=-f73QTQQd7A