Research Project: Corporate Social Responsibility in UK Supermarkets

This research project investigates the impact of Corporate Social Responsibility (CSR) on the financial performance of the 'Big 4' supermarkets in the United Kingdom: Tesco, Asda, Sainsbury's, and Morrison's. The report begins with an introduction outlining the research aims, questions, and hypotheses, emphasizing the significance of CSR in the competitive UK supermarket landscape. A comprehensive literature review provides an overview of CSR, its benefits on business performance, and its impact on financial performance, specifically within the UK supermarket context. The methodology section details the research design, approach, and data collection methods, including primary data sources. The data analysis section examines the CSR activities of Tesco and Sainsbury's, assessing their impact on financial reports. The report concludes with findings, recommendations, and a reflection, offering insights into how CSR initiatives affect financial outcomes within the UK supermarket sector, highlighting the importance of CSR for long-term sustainability and investor relations in a competitive market. The report also highlights the importance of CSR activities and how it helps to improve the financial performance of companies.

Research Project

Table of Contents
INTRODUCTION ...........................................................................................................................................4
Overview of the research............................................................................................................................5
Research aims and Questions .....................................................................................................................6
Research Aim.....................................................................................................................................6
Research questions:...........................................................................................................................6
Hypothesis ........................................................................................................................................6
Significance of the research...............................................................................................................6
Rationale of the research..................................................................................................................7
Limitations of the research................................................................................................................8
LITERATURE REVIEW..........................................................................................................................8
Overview of CSR................................................................................................................................8
Benefits of CSR on business performance.......................................................................................10
Impact of CSR on Financial Performance.........................................................................................11
The UK Supermarket........................................................................................................................12
Relationship between CSR and Financial performance of company................................................14
CSR improve the financial performance..........................................................................................15
RESEARCH METHODOLOGY.......................................................................................................................16
Types of Research............................................................................................................................17
Research design ..............................................................................................................................18
Research Approach..........................................................................................................................18
Data Collection Method/Analysis....................................................................................................19
Primary data:.........................................................................................................................19
Research choice...............................................................................................................................21
Ethical consideration ................................................................................................................................22
Research Plan............................................................................................................................................22
DATA ANALYSIS..........................................................................................................................................22
CSR activities done by Tesco and its impact upon financial report............................................................23
CSR activities done by Sainsbury's and its impact upon financial report.........................................25

Conclusion and Recommendations ...........................................................................................................27
Reflection........................................................................................................................................27
CONCLUSION.............................................................................................................................................29
RECOMMENDATIONS................................................................................................................................30

INTRODUCTION
Research project is going to show how corporate social responsibility impacts upon
financial performances of big four supermarkets that are doing business in United kingdom and
in other countries as well like Tesco, Asda, Sainsbury's and Morrison's. Within United kingdom,
it can be said that the supermarkets are carrying a market share approximately to 76% or maybe
more than that which helps them in grabbing a good position not only in the UK market but it in
other countries as well. On the other side, corporate social responsibility is said to be crucial
element, which is playing important role for supermarkets like Tesco, Asda, Morrison’s and
Sainsbury’s. Building a positive image among customers with the help of CSR has become
normal in present time but it is also required for companies to focus upon financial performance
is well as this can directly e impact upon company’s performance level as well. Along with this,
many researchers has developed reports on both financial performance level of the company,
which good affected by CSR activities performed by them. But, this present research report will
help in focusing upon the four different supermarkets of United kingdom that are famous in all
over the world. This will automatically make the whole investigation to go much more authentic
and detailed in regards to the four supermarkets like ASDA, Tesco, Sainsbury’s and Morrison’s.
Therefore, it can easily be understood that focus that research is going to be built with
authenticity. Apart from that, it has been analysed that CSR activities are directly connected with
the investors and other sources from which an organisation within the supermarket can raise
funds for itself. Therefore, it is important for companies to perform CSR activities so that their
financial performances can be improvised based on the trends, just because in present time the
competition among different supermarkets like Tesco, Sainsbury’s, Morrison’s and Asda is high
in nature. It is much required for business organisations that are dealing within the supermarket
that conducting CSR activities is not only a part of making profits out of it, but it carries a wider
area that gets affected of the company. In simple words, CSR not only e helps a company in
enhancing the profit margins but it can also help them in sustaining within the competitive
market for a longer period of time and this can only be done through building a much effective
CSR act that could help company in grabbing the attention of investors. Along with this,
corporate social responsibility is also helping business organisation like Tesco, Sainsbury’s,
Morrison’s and Asda in reaching to new heights, where they raised competition for other retail

supermarkets like JS Supermarket, LIDL and so on. This has raised many questions not only for
the retail industry but for other fields as well, where corporate social responsibility is something
that could help business firms in reaching to new heights.
There are many cases, which came in front where an organisation was looking forward to
conduct the CSR activity, but somehow it lead the company to face a range of issues like less
attention of investors was being grabbed and many more. This happened because of the objective
that company was trying to improve profit margins through conducting CSR act. This made
investors realize that the company is moreover believing in earning profits, but it should also so
keep its focus upon social responsibilities as well that they are having in regards to the public of
all over the world.
Overview of the research
Companies that are dealing within the Supermarket industry of United Kingdom, has
faced a range of issues in regards to their financial performance in last few years. This has
happened due to less CSR activities, that has been done by the business organizations. This
impacted negatively upon overall financial positions of different supermarkets like Asda, Tesco,
Sainsbury’s and on Morrison’s as well. Therefore, for the famous supermarkets it will be
required for companies to take into consideration of all the activities that are directly linked with
the corporate social responsibility. This will help, business organisations like Tesco, Asda and
more to improve their overall financial position throughout the world. It is much required for
business organisations to develop a range of strategies in regards to the CSR, so that
development can easily be seen within the market of United Kingdom. If it is talked about,
corporate social responsibility along with the financial performance of a business company
dealing within retailing business sector as a supermarket. Along with this, it can also be said that
it is pretty much required for a business organisation to develop much more effective corporate
reports, as this helps in developing the interests of targeted investors. Various big organisations
has now developed both integrated non-financial along with financial information within their
annual reports.

Research aims and Questions
Research Aim
Present investigation research is being developed “To analyse the impact of corporate
social responsibility reporting on the financial performance of 4 Big supermarkets of the United
Kingdom.” In order to attain this, researcher will be calculating the profit ratios of different
organisations like Asda, Tesco, Morrison’s and Sainsbury’s considering there financial books. In
regards to CSR, and the activities related to this are being done by these 4 supermarkets and the
researcher will be comparing all of these organisations focusing upon theirs financial
performances. Researcher will use annual report, news articles, UK supermarket CSR report and
sustainability report to gather information on where these firms have been socially responsible.
Research questions:
 How the Big 4 supermarkets measure CSR ?
 Does CSR improve the financial performance ?
 To assess the extent to which CSR report meets the guidelines ?
 To provide the positive and negative impact the supermarkets have on social,
environmental and economy ?
Hypothesis
Based on the aims of the research, the hypothesis will be as follows:
 H1: There is a relationship between the CSR activities and the financial performance.
 H2: There is an impact between CSR activities and financial performance
Significance of the research
The reason behind conducting the investigation is to analyse how CSR activities could
help a business organisation that is dealing in the supermarket industry of United kingdom. This
title has been taken into consideration because of companies has kept their focus on CSR
activities only to improve their profit margins but they also should understand that how CSR acts
can help organisation to a wider context. It is important for companies to innovate themselves
and developed CSR activities in a way where they could help both profit margins of the company
and raise standards of living beings. In past few years, business organisations has let themselves
to go through range of problems in regards to their fundraising techniques. This happened due to

supermarkets like Tesco has only kept their focus upon enhancing the profit margins. Instead of
that, for running good range of profits it is required for the company to have positive image as
well within the market in which it is performing its operations.
The 76% market share which has been discussed above, it reached to a declining position
and this happened due to the involvement was found that organisations for less focusing upon
improving the living standards of citizens of United kingdom and of other countries. Here,
companies has kept their focus on enhancing the profit margins. In order to analyse the activities
done by business companies, like Tesco, Sainsbury’s, Asda and Morrison’s in regards to CSR,
researcher has taken into consideration of their annual reports that will investigator in pulling out
much more favorable outcomes in regards to the chosen topic. Another reason behind conducting
the investigation on the chosen topic is the self-interest of researcher and the trend which is
going in present time to less focus upon the standardization of living but to enhance the profit
margins of the company.
Rationale of the research
The vital reason behind conducting the research is to enhance the knowledge in regards to
how financial performance of various supermarkets can effectively improvised through
considering the corporate social responsibility activities. In past, if it is talked about various high
street supermarkets like Tesco and Morrison's they consists with their own policies in regards to
develop the interests of investors in their future plans. Here, an example can be taken is of a big
supermarket i.e. Tesco, where company has done charity for donations, from various local food
banks. This is one of the crucial strategy that has helped Tesco to improve the overall
performance level in regards to finance and funding.
This was done by organisation to grab the attention of investors, so that funds could
directly be raised for upcoming plan. There is another example can be taken of Morrison's, which
was effectively donated approximately £18 millions to the schools (21,000), in order to develop
mentality of students in regards to keeping the environment much more safe and effective in
nature as well. This has helped firms like Morrison's, Sainsbury’s, Tesco and Asda to enhance
their own performance level in much effective and efficient manner. But, there were many cases
that came in front of public like green washing activity and so on. This impacted negatively, not
only on company's image but on financial performances as well, because customer's opinion in

regards to the company got changed due to the wrong doings, that took place. Another reason
behind selecting the topic was self interest of investigator who has developed his interest in
regards to the chosen topic, due to corporate social responsibility is said to be one of the crucial
business factor that majorly aid business organisations in reaching to new heights.
Limitations of the research
Term, corporate social responsibility is said to be one of the crucial element that majorly
helps a business organisation in gaining competitive advantages through attracting customer's
towards different products and services. But, this factor is hard to study in depth because the
reason behind this is that in present business scenario, business companies that are dealing within
retail industry has kept their focus on improving profit margins. The researcher here, will be less
efficient and it is may be possible that overall investigation would pull out a less authentic based
data. Here base, which has been created by researcher will only focus on the sections impact on
financial performance of companies like Asda, Sainsbury's, Tesco and Morrison's which could
be considered as Big 4 Supermarkets of United Kingdom.
LITERATURE REVIEW
It is explained as comprehensive summary of the past research topic. This is being
considered as a section of an investigation, which mainly enumerate, summarize and also
examine the previous investigation. It provides theoretical base for an investigation that aids in
identify nature of an investigation. It is helpful in acknowledge work of previous investigators.
Literature review part is critical as well as in depth evaluation of past research. In order to
collecting the data, there has been secondary sources of information used such as books, internet
sources, articles etc. It is helpful in provide the detailed information regarding specific research
area in an effective or significant manner.
Overview of CSR
On the basis of opinion of …. it has been stated that Corporate Social Responsibility is a
kind of international business self- regulation. It aids an organisation to be socially accountable
to stakeholders, itself and public. It is management concept in which organisations integrate the
environmental as well as social concerns in business operations and the interactions with
stakeholders. Mainly Corporate Social Responsibility is understood as being way by which an
organisation attained balance of environmental, social and economic imperatives while

addressing shareholders expectations. On the other hand, Corporate Social Responsibility of
corporations operations within the society to give contribution towards, environmental. Social
and economic development that develops positive affect on society. It consists search for
effective or better “fit” among the societies as well as businesses under which they are operating
their business. In addition to this, the main reason behind conducting CSR activities to give
benefits to society and also provide them better social benefits in an effective manner. With the
help of executing CSE concept, company can gain competitive benefits for an instance increased
access to markets and capital, maximise sales, savings operational cost, make improvement in
productivity and many others.
Corporate Social Responsibility is a wider concept that mainly used to explains efforts of
an organisation to make improvement in society in some manner. It is related to how the
organisation manage their process of business in order to produce positive affect on society. It
covers the sustainability, ethics and social impact that is about to conduct the core business and
make money. It is mainly continuity commitment through the business to behave in an ethical
manner and give contribution towards economic development at the time of make improvement
in quality of life. The social responsibility is one of the main part of wealth creation process. If it
will managed in proper manner then competitiveness will be enhanced and wealth creation about
society will also be enhanced. On the other hand, Corporate Social Responsibility is evolving the
business practice that help in incorporate sustainable development in to business model of an
organisation. It helps in develop the positive impact on environmental, social and economic
factors. The main benefits of CSR is to develop better reputations, attract the positive attention,
reduce environmental impact, save money by operational efficiency and also inspire an
innovation.
The main purpose of CSR towards company is to conduct the business in ethical manner.
It consists range of the activities like working in the partnership with local communities. For an
organisation, CSR is one of the most effective way to enhance competitive benefit, protect and
also enhance brand awareness. An establishment of CSR strategy is necessary component of
competitiveness of an organisation and should be led through company itself. Having the
procedures and policies in place with the integrate environmental, social and ethical concerns
into the business core strategy and operations. The overall aim of CSE is to attain positive impact

on society as whole while enhancing creation of the shared value for business owners,
shareholders, stakeholders and staff members. In addition to this, CSR is practice of integrating
the environmental as well as social goals in to the operations of business. The main role of
Corporate Social Responsibility consists help control cost, attract the top quality talent, make
improvement in brand of firm and also facilitate the financial success for long period of time.
Benefits of CSR on business performance
As per opinion of Samantha Muir, (2019), Corporate Social Responsibility is about s
company taking the responsibility for impact on activities as well as decisions on society,
environment and community aspects. It is a managerial obligation to take the actions which help
in protect as well as improve society welfare as whole and interest of company. The main
advantage of pursuing strategy of CSR is that it helps in generate positive brand image of an
organisation. Firms which engage meaningfully in CSR, they generate enhanced media coverage
that earned opportunities to paid, free and positive publicity. In addition to this, strong CSR
program, can attract the more partners and investors to firm through illustrating business more
than bottom line. Other than these, there are some benefits of CSR give below:
Positive impact in community- Keeping the CSR in mind helps in encourage business to
act in an ethical manner and include environmental and social impact on business. Under this,
firms can avoid detrimental affect on business on community. If companies will make changes in
its services then it will help in provide advantages to business. Through this, positive impact will
be developed on society and the performance of business will be improved in an effective
manner.
Encourages professional and personal development- Giving staff members with better
opportunities included in socially responsible activities of firm which can have advantages of
learning new skills to employees. Through undertaking the outside activities of work
responsibilities, staff members gave the better chance to give their contribution towards work
and learn something new. With the help of supporting activities, firms can encourage
development as well as support for staff members.
Increase relationship with consumers- As per viewpoint of Chelsea Levinson (2019)
Strong CSR framework is necessary to developing as well as maintaining the trust among
company and consumers. It can give the strengthen, develop alliances and create strong work

relationship with existing and present consumers. It is helpful in provide the better public value
outcomes that help in enhance business performance.
Enhanced employee satisfaction- Under this, a way firm treat its community says more
about how an organisation treat with its staff members. The people feel supported and respected
in jobs are more satisfied and productive at workplace. In this, providing the employees
opportunities at the time of working hours, develop sense of the community within company and
connection to surrounding community. In addition to this, staff members ill gain the motivation
in work by personal- development opportunities. If the employees will be satisfied from their job
then in this case their performance level will be enhanced and they will work towards attaining
set business objectives.
On the other hand, Corporate Social Responsibility helps in attract the high qualified and
capable talent to business. Many employees are committed to the value- based organisations and
make investment in conducting CSR programmes. In addition to this, better CSR strategy will
help in attract as well as sustain quality employees to enhance better business performance.
Impact of CSR on Financial Performance
According to opinion of Emelie Josefin Melin, (2015), Corporate Social Responsibility is
concept that attract the world wide attention as well as acquired new meaning in global economy.
In recent years, sharp interest in Corporate Social Responsibility has been stemmed from advent
of the international trade and globalisation that reflect in enhanced business complexities and
demands for increased corporate citizenship and transparency. Th concept of CSR is developing
at quick pace and gaining the popularity. Under this, CSR develops impact on the financial
performance of business. Variables which included for financial performance such as Net profits,
Return on Equity, Total assets, Earning per share etc. Corporate Social Responsibility is
considered as financial and independent variables like Total Assets, Earnings per Share, Return
on Assets and Net profit. In addition to this, CSR is becoming most necessary components of the
modern corporate culture because of enhancing expectations from stakeholders in light of
developing global presence of require for strong environmental protection, social care and
corporate governance. Corporate Social Responsibility can promote the respect for company at
marketplace then can result in high sales, increase loyalty of staff members and also attract the

more personnel to company. Its main focus on the sustainability issues which may reduce cost
and also make improvement in efficiencies.
The CSR is forced companies not to just having focus on financial performance in
context to gain high profit but taken in to consideration regarding significance of working for
welfare of societies. The financial return is an important outcomes but it is not sole criterion that
driving investment by including ethical concerns. The CSR is responsibility of company to its
suppliers, consumers, staff members and government when it undertakes the economic
responsibilities to stakeholders. In addition to this, firms engage in social responsibilities
activities can increase relationship of company with stakeholders. The CSR is helpful in
improving value of company that prevent an investigators to prevent. It many be connected with
the financial performance as to search that what degree the financial performance needs to be
improves by conducting better Corporate Social Responsibilities. In addition to this, using d
return on equity (ROE) and return on assets (ROA) of financial statement of an organisation
show financial performance. ROA indicated that how the organisation enhance profit level
through using the total assets within particular time period. If the ROA is high then it indicated
that dim can earn the high profit then own asserts. On the other hand, ROE shows how an
organisation use the property of firm. If in this case, ROE was high the the management of
company can run in an effective manner. In addition to this, CSR is helpful in develop the image
of firm, maintain legitimacy and reputation of investors. There is a need for company to expand
scope of CSR mainly in those firms which have better financial performance.
There is a need to companies to manage the CSR activities in a manner that includes
society. Actions as well as awareness to minimize any kind of effect in short and long term so
that the benefits can be provided to society as well as organisation. With the help of conducting
CSR activities, risk will be minimize and the financial performance of company will also be
improved.
The UK Supermarket
According to opinion of … it has been stated that Super market of United Kingdom has
been experienced main changes in past few years. In United Kingdom, there are large number of
supermarkets and the people which go to these types of super markets once in a week. The
supermarket industry of United Kingdom is beneficial as well as competitive. There are four