As supermarkets top FTSE 100 ranking for charity giving, how are other food & drink operators doing?

Supermarkets made an easy target for politicians and trade unions looking for a scapegoat for soaring food prices last year.

Tesco was guilty of “driving inflation” with “rampant profiteering”, claimed Unite general secretary Sharon Graham in April. Lib Dem leader Ed Davey claimed getting prices back under control would mean “cracking down on profiteering by… the big supermarkets”.

A Competition & Markets Authority investigation that followed cleared supermarkets of profiteering in July that year.

Now, further vindication has come from an investigation into 2023 charity giving by FTSE 100 companies – showing Tesco and Sainsbury’s gave a higher percentage of profits to charity than any other company, ranked first and second in the rankings of the Charity Aid Foundation’s (CAF’s) Corporate Giving 2024 report. 

Tesco donated 11.9% of pre-tax profits and Sainsbury’s was not far behind at 10.6% – a country mile ahead of the FTSE 100 average of 0.9%. Apart from ad agency WPP, in third place at 10.4%, no other FTSE 100 company managed even half the percentage donated by the two supermarkets.

The pair led by better maintaining the value of donations despite pre-tax profits falling. Indeed, Tesco upped the value of donations by £30m to £119m, despite its profits halving from just over £2bn to £1bn according to the analysis, based on annual reports for financial years ending in 2023.

As food banks called out for extra support, the UK’s biggest retailer answered, with FareShare and the Trussell Trust among those to benefit from its increased generosity, the report says.  

Sainsbury’s pre-tax profits fell even faster, from £854m to £327m, but its generosity did not recede at anywhere near the same rate, with donations worth £38.4m in 2022 and £34.5m in 2023.

Unite did not provide a comment on the supermarkets’ charitable performance.

Keeping pace with profits

CAF head of client experience Philippa Cornish notes supermarkets are “better placed than some” to make “in-kind donations” thanks to their access to a wide range of products.

But she adds: “It’s important to recognise the commitment of companies who continue to donate despite falling profits, and I hope it inspires others to increase their own investment.”

Tesco and Sainsbury’s also bucked a trend across the FTSE 100 of donations not keeping pace with profits over the past decade. Despite FTSE 100 combined profits increasing by 49% since 2014, total donations dropped by 13% in the same period, representing a 34% decline in real terms.

For CAF, it’s not good enough. It wants FTSE 100 companies to give a minimum of 1%, a change it says would mean £5bn more for charities a year.

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Of 28 companies above CAF’s 1% threshold, M&S was the only other food and drink retailer, giving 1.2%.

It was ranked 22nd, its donations going to “various charitable organisations”, not including £2.3m raised by customers and staff, says the report. M&S argues the exclusion of those in-kind donations means it is not a full picture compared with other retailers.

“Supporting charities is hugely important to us at M&S and we aim to donate at least 1% of our pre-tax profits in line with the recommendation from Charities Aid Foundation,” adds a spokesperson.

“In October 2023, we launched our biggest ever charity partnership with Young Minds with a £1million corporate donation, and together with the support of our colleagues and customers, have already raised £2 millon out of our £5 million three-year target to support young people struggling with their mental health.”

Food and drink operators above the threshold were outnumbered by those below, including Unilever. The fmcg giant’s generosity stretched to 0.7%, including “cash and in-kind community and charitable investment” across its highest contributing markets and excluding contributions under €100,000.

Languishing near the bottom of the table, B&M gave just 0.03% of its £366m pre-tax profits, in 80th place. But that covered cash donations only and excluded £9.7m associated with B&M’s Christmas campaign raising toy donations for children living in poverty. 

B&M did not respond to The Grocer’s request for comment.

Associated British Foods gave 0%, but says its ultimate majority owner, the Garfield Weston Foundation, donated £91.1m and is funded principally by dividends from ABF.

“In addition, companies within the ABF group contribute significant amounts to charity in their own right,” adds a spokesperson.

It was higher up the table than Ocado Group, whose annual report did not quantify charitable donations, meaning it fell into the N/As at the bottom of the table.

An Ocado spokesperson says it made charitable donations of £1.1m, additional cash donations of £400,000 to environmental causes and charitable stock donations valued at £10.7m in the period, including £2.5m given by customers through the company’s ‘You Give We Give’ campaign.

“The Company continues to support a network of food partners and social enterprises working towards ending food poverty in the UK through grocery donations of groceries, financial contributions and provision of operational assets including vans,” the spokesperson adds.

Getting customers on board with giving makes a lot of sense. After all, “research shows two-thirds of the public believe businesses have an obligation to support the local communities in which they operate”, says CAF’s Cornish.

Ultimately though, “giving should be viewed as a crucial pillar in a responsible business strategy”, she adds.