Grocery Outlet outlines top priorities in first ESG report

Dive Brief:

Grocery Outlet released its first-ever Environmental Social Governance (ESG) report this week, according to a Monday announcement.
The discount grocer said it is focused on six ESG topics, including “critical” ones like food waste avoidance, ensuring affordable food access and responsibly supporting independent operators, per the report.
“At Grocery Outlet, we believe that our long-term success is naturally aligned with our ability to positively impact our communities, our people and our planet,” Grocery Outlet President and CEO RJ Sheedy in the report.

Dive Insight:

The report covers Grocery Outlet’s progress on community-, people- and planet-focused efforts in 2022.

Grocery Outlet started its report by providing 2022 highlights including:

Having more than 98% of its stores use timed lighting and heating systems to lower energy consumption
Passing an estimated $2.4 billion in savings on to customers
Having 53% of its employees at the director level or higher identify as women or racial/ethnic minorities

By 2024, Grocery Outlet aims to provide customers with $3 billion in annual savings, the company noted in the report.

On the sustainability front, Grocery Outlet shared that all of its stores use an energy management system to control and monitor energy usage and that 17% of its stores currently use cloud-based refrigeration analytics to reduce energy use and refrigerant leak rates, noting it plans to expand this technology to more locations.

In 2022, over 30% of sales were attributable to produce and Natural, Organic, Specialty and Healthy (NOSH) products, per the report.

Grocery Outlet said that it plans to develop in the future metrics that demonstrate the scale of the company’s food waste diversion through opportunistic sourcing and operational efficiencies: “This will also help us quantify the emissions we help avoid.”

The company said it will also explore the feasibility of sourcing renewable electricity in the coming years.

On the labor front, Grocery Outlet shared that it recently rolled out a new handheld technology application to improve how its operators receive products and manage inventory levels. In 2022, the company launched a free app-based mental health support and also started an “I Work Safely For” committee as a space for leadership to focus on opportunities to improve safety at regional fulfillment centers and company-operated stores.

While Grocery Outlet said it is aligning its data with the SASB (Sustainability Accounting Standards Board), the company disclosed little data for fiscal year 2022 connected to that framework.

“While in our first report we do not have the capability to report on all activity metrics within the SASB framework, we recognize its significance and anticipate utilizing it as a valuable roadmap for data collection and ESG goals in the future,” Grocery Outlet said.

The ESG report follows Grocery Outlet’s work in 2022 to conduct its first materiality assessment to help identify and prioritize ESG topics. The discounter said that it worked with an unidentified external expert to conduct industry benchmarking and get insights from company leaders, employees, customers and other stakeholders. Last year, the company conducted its first Greenhouse Gas emissions inventory using 2021 as the baseline year to better understand the impact of its Scope 1, Scope 2 and select Scope 3 emission categories. Grocery Outlet performed its Scope 3 emission estimates in accordance with the GHG Protocol.

Based in Emeryville, California, Grocery Outlet has more than 440 stores across California, Washington, Oregon, Pennsylvania, Idaho, Nevada, Maryland and New Jersey.