Seeking to Save Money, Live Better, and Support Sustainable Consumption -- Seiyu GK.

JFS Newsletter No.84 (August 2009)

Seiyu GK. is a major retail chain in Japan, established in 1963. In 2002, Wal-Mart Stores Inc. in the U.S. became Seiyu's largest shareholder, and Seiyu has been a wholly owned subsidiary of Wal-Mart since June 2006.

Affiliated with Wal-Mart, the world largest retail chain, Seiyu has been promoting a "low-priced" selling strategy under the slogan "Every Day Low Prices." It also started a new campaign, "KY," which stands for "kakaku-yasuku," meaning "low prices" in Japanese. Under the new campaign, about 1,700 items were reduced in price, and Seiyu is now on the path to being a lower-priced supermarket chain for the benefit of consumers.

In October 2005, Lee Scott, then-chief executive officer of Wal-Mart, made a speech titled "Twenty-First Century Leadership." Since then, Wal-Mart has sought to become "a more sustainable company" for the future sustainability of their business and the world. Under the current mission, "Save Money. Live Better," the Wal-Mart Group provides consumers around the world with low-priced products and still-valuable shopping opportunities, while trying to help them realize more affluent lives.

Lee Scott made the following statement in Wal-Mart's 2006 Sustainability Report: "From the day that Sam Walton opened the doors of the first Wal-Mart store in 1962, our mission has been to save people money so they can live better. Today that mission extends to sustainability."
http://walmartfacts.com/reports/2006/sustainability/companyMessage.html

The Group has over 7,900 retail stores under 62 store names in 15 countries. A total of over 200 million consumers visit these stores every week. It employs over 2.1 million "associates" in the world, with U.S.$401 billion sales in the 2009 fiscal year. And Wal-Mart topped America's Most-Admired Company list in the industry of general merchandisers in Fortune Magazine in 2009.

With the parent company practicing sustainability as part of its everyday business, Seiyu has also been operating in line with Wal-Mart, long-nurturing their ongoing environmental initiatives in Japan. Emi Obata, in Seiyu's corporate affairs public relations department, told us: "We feel Wal-Mart's efforts are sincere and that they have a strong will to do everything they can to realize the goal of having customers 'save money and live better.'"

Re-evaluating the Common Food Tray

Seiyu shapes their sustainability initiatives in three areas in line with Wal-Mart: energy, waste, and products. In so doing, they can share their tangible long-term goals in these areas, and make efforts to achieve them as a solid group.

Among these three areas, one of the remarkable developments is "reducing product packaging," which ultimately aims to "sell products which conserve resources and protect the environment sustainably." Regarding containers and packaging, the company focuses its efforts on fresh food and those for its private brand products that are developed originally by Seiyu.

"We noticed that quite a few customers unwrapped food products after paying at checkout counters, removed the food trays, and repacked the food into small plastic bags. After all, those trays are rather bulky, and they have to be washed and dried for recycling. From this observation, we sensed customers felt the small bags were good enough to bring home food. So we started what we could do to reduce the amount and size of containers and packaging, such as changing the specifications of trays, as well as "no-tray" initiatives to stop using trays as much as we can. It is easier to put ideas that meet customers' requests into practice," Obata said.

In terms of Styrofoam trays, Seiyu previously used more than 40 kinds of trays, all different in size and shape. These included some with colors that made food look much more beautiful and appear tastier. In fiscal 2008, however, the company stopped using colored trays, first for meat packaging, and instead adopted lighter, white ones only. The variety of trays was also reduced to only nine. As a result, Seiyu successfully achieved a reduction of 13.2 tons of trays annually.

"When it comes to chicken, for example, it needed two processing procedures before it reached store shelves. The first procedure was to pack a big chunk of slaughtered chicken to bring chickens to the company's processing plants. Then, the second was to unpack and cut them into small pieces so they were more attractive to customers, and then carrying them on other trays to stores. But now, with the cooperation of suppliers, we have created a new system to vacuum-pack chickens for sale in one processing step. Using this system, we can not only reduce the waste and hassles associated with packaging at each stage of processing but also offer customers fresher food in a more hygienic way at lower prices. We will continue to promote this initiative further," said Obata.

More Zero-Waste Stores, More Customers Bringing Their Own Bags

The ultimate goal in the area of waste is to reduce the amount of garbage to zero. In fiscal 2008, 41 of some 373 company stores attained zero waste.

"The most important thing is to separate trash to attain zero waste," said Obata. "Our waste management staff at head office paved the way by negotiating with the government and recycling companies. The number of stores that have a system to attain zero waste, in theory, is increasing, but zero waste can only be effectively achieved when trash is separated at the stores. So we encouraged each store to sort their trash thoroughly into 12 categories. As a result, we achieved a recycling ratio of 75 percent in fiscal 2008."

In terms of reducing the use of plastic shopping bags, the company achieved its target to increase the ratio of customers who bring their own bags for shopping to 50 percent for the first time in April 2009. In July, the ratio steadily rose to 51.4 percent.

Local governments are actively making efforts to reduce the use of plastic shopping bags. At the municipal level, 384 municipalities in 23 prefectures are planning to start charging shoppers for plastic bags by the end of March 2010, according to a study as of November 1, 2008, by Japan's Ministry of the Environment. Seiyu is determined not to charge shoppers, on the other hand. Instead, the company is focusing all its store-wide energy to encourage shoppers to think ahead and voluntarily bring their own bags, even if there is no charge for plastic shopping bags.

Businesses, Communities, Homes, and People's Life Integrated with Sustainability

In 2008, Wal-Mart named the two weeks before and after Earth Day, on April 22, as Earth Month, and it conducted a campaign to actively promote environmentally friendly products. In 2009, the company extended the campaign to be Wal-Mart Group-wide. About 7,800 stores worldwide, including Seiyu, participated.

In this campaign, Seiyu explained the environmental benefits of about 1,000 environmentally friendly products, for instance, in its point-of-purchase displays. According to the results of the questionnaire conducted after the campaign, Obata said, "The point-of-purchase displays didn't get much attention from customers. We saw the difficulties with communicating the features and benefits of products on our sales floors."

Obata also said, "It is a specialty of retail shops to be engaged in educational activities and provide information on sustainability directly to customers. Keeping this in mind, for Earth Month next year and after that, we hope to raise awareness of sustainability among our associates and make the campaign easier for customers to join."

As for raising awareness among associates, Wal-Mart is working on something called the Personal Sustainability Program (PSP). It is a program under which the company sets a sustainability target in the areas of recycling, energy saving, healthy lifestyles, etc. Seiyu is conducting a similar program called "My Sustainability."

Obata said, "We should not limit our sustainable activities to businesses. Everything, including businesses, homes, communities, and our own lives can be more sustainable. That is what Wal-Mart communicates and practices. Seiyu will also put that into practice."

On July 16, 2009, Wal-Mart announced a development policy for the Sustainable Product Index, the first attempt to measure the sustainability of products. It is an effort to build an integrated data source to evaluate the sustainability of various products, a way to give customers the most transparent information on the quality, purchase payment, and transporting processes of products.
http://walmartstores.com/FactsNews/NewsRoom/9277.aspx

As the first step, the company plans to evaluate the status of sustainability efforts of Wal-Mart and its business partners, numbering over 100,000 suppliers around the world, based on 15 questions in four areas: "energy and climate change," "material efficiency," "natural resources," and "people and community."

Wal-Mart is trying to build its image as a sustainable business and society based on its belief of utilizing its position as the world's biggest retailer, along with its fresh ideas and sense of speed. Following the attitude and approach of Wal-Mart, Seiyu plans to further accelerate its own efforts in Japan toward sustainability.

Written by Reiko Aomame