Journal of Service Science and Management, 2012, 5, 373-385 Published Online December 2012 ( 373
Assessing the Sustainability of Food Retail Business: The
Case of Konsum Värmland, Sweden
Addis Bekele, Techane Bosona, Ingrid Nordmark, Girma Gebresenbet, David Ljungberg
Department of Energy and Technology, Swedish University of Agricultural Sciences, Uppsala, Sweden.
Received September 12th, 2012; revised October 16th, 2012; accepted October 26th, 2012
It is public concern that the impacts of food retail business activ ities need to be recognized and addressed properly. The
main objective of this study was to assess the sustainable business management of a cooperative food retail business in
Sweden, known as Konsum Värmland (KV). The necessary data and information on history and status of KV, and its
practical activities concerning the implementation of sustainable development principles as well as the motivation and
challenges encountered during the implementation were gathered via reviewing different documents, research papers
and press releases; interviewing decision makers and other personnel in KV and other researchers who have investi-
gated KV. The implementation of sustainability initiatives was analyzed in depth mainly based on triple bottom line
sustainability theory. The findings indicate that KV has incorpor ated the su stainability issu es into its mission and v alues.
It practically has been implementing sustainability programs in env ironmental, social and economic dimensions . It pro-
vides environmentally friendly and quality food products using its main brands names for local products. The major
drives for KV to implement sustainability initiatives are leadership and employees’ commitment, organizational core
values, and members’ and consumers’ awareness. On the other hand, the major challeng es to such sustainability initia-
tives are high price of greener products, high logistics cost and emission due to long winter time, the seasonality of local
product, and high cost of large scale investment.
Keywords: Sweden; Konsum Värmland; Food Retailer; Sustainable Business Development; Sustainability Indicators;
Triple Bottom Line
1. Introduction
During the recent two decades the principles of sustain-
able development have attracted more attention and im-
pressive progresses have been seen in realization of sus-
tainability principles in environmental, social and eco-
nomic dimensions in different sectors including food and
agriculture sectors [1]. According to World Commission
on Environment and Development (WCED), sustainable
development is “development, which meets the needs of
the present without compromising the ability of future
generation to meet their own needs” [2]. Sustainability
issue is too complex to fully understand and easily im-
plement [3]. Sustainable development encompasses a
balanced approach for economic growth, environmental
justice and social equity [4]. Business firms and corpora-
tions have understood th e need to addr ess the sustainabil-
ity issues and consider their relation ship with consumers,
supply chain networks, stakeholders and providers of bu-
siness solutions in order to create sustainable solutions
and performances [5,6].
Food retail business (FRB) operation is one of busi-
ness areas where the concept of sustainability is being
addressed. FRB makes a lot of contributions for the eco-
nomic growth and employment opportunities in Europe
where food retailers are becoming large corporations
because of merger and acquisition trends. According to
confederation of the food and drink industries of the EU
[7], although the experience and consolidated markets of
food retailers differ significantly in European member
states, the trend in general is towards larger stores and
hypermarkets. For example, the Swedish food retail
market has been the most consolidated one, up to 91.7%
shared between four to five actors in the sector and the
situations in other countries like Germany, France and
Netherlands have shown the same trend. Even though
there are fewer players in the new food marketing system,
the food system is more consumer-driven than before [8].
Food retailers are important players to utilize resources
wisely and to reduce impacts on the environment and
society [9]. Because, they have good economic size and
strategic position between the manufacturers and con-
sumers, influence on the supply chain, constructive and
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
negative role on the society and the natural environment,
and their ability in sh aping up the consumer behavior.
In developed countries in Europe and North America,
approximately 27% of cereals and up to 33% of fish and
seafood are lost at consumption level [10]. WCED [2]
states “unsustainable patterns of consumption and pro-
duction particularly in industrialized countries are major
cause of global environmental degradation”. After fifteen
years, this report becomes the basis for international and
European policy on sustainable business development.
Business companies have to assess their operational
impact on the environment and society and adopt strate-
gic sustainable program. However, there are no well es-
tablished standards for assessing the sustainability of
such business firms and there is no well defined stan-
dardized way of reporting [11]. As the awareness of the
society on sustainability issue is increasing, the society
expects more sustainability reports and companies need
to produce trustworthy and accessible reports.
The main objective of this study was to carry out sus-
tainability assessment of Konsum Värmland (KV). The
assessment was targeted to identify the major sustain-
ability indicators for successful sustainable business de-
velopment (SBD) and investigate the progress of KV in
implementing its sustainable business development stra-
tegy; to know how Konsum Värmland incorporates sus-
tainability principles in its business operation; and to iden-
tify the main motivations and challenges encountered KV
during the implementations of sustainable business de-
velopment principles.
1.1. Sustainable Business Development
Due to the demands from the internal and external pres-
sures, companies are trying to transform the traditional
management approach to a dynamic and fully intercon-
nected management system to involve stakeholders, con-
sumers and innovative environmental friendly technolo-
gies in the management process. The customer, the me-
dia and the society at larg e expect good supply n etworks,
allies and cooperation whether it has direct or indirect tie
to the company. Leading companies started to take action
to incorporate the sustain ability pr inciples, into th eir stra-
tegic business development [12]. In general sustainable
development perception has different stages, and it em-
braces political opinions and various scholarly perspec-
tives. SBD integrates the economic, social and environ-
mental viewpoints which could be described with triple
bottom line (TBL) theoretical frame work.
1.2. Triple Bottom Line
The term triple bottom line (TBL) refers to “simultane-
ous pursuit of economic prosperity, environmental qual-
ity, and social equity” [13]. The notion behind the triple
bottom approach is to measure companies’ performance
not only by using traditional bottom line (the economic
aspect) that would not show the whole picture of the
company’s performance, but also by its environmental
and social performance [12,14]. Figure 1 presents the
conceptual framework of TBL.
1.2.1. Environmental Sustainability
The urgency to protect and conserve the natural envi-
ronment became the major values embraced by most
leading companies [15]. Companies set environmental
strategies to forecast and measure the impacts of their
operational activities on the env ironment and start to take
actions to significantly reduce waste and environmental
pollution in advance and to take the positive business
opportunities [16]. Moreover, companies started to real-
ize the government environmental regulatory as compe-
tive business opportunity and try to capitalize on the en-
vironmental performance [17].
Proactive environmental management involves five
key approaches [16,18-20]. These are: 1) waste minimiza-
tion and prevention (material substitution, process modi-
fication, material reuse within the existing processes,
materials recycling to a secondary processes and material
reuse within a different process); 2) demand-side man-
agement (providing products that are demanded by cus-
tomer and increasing awareness of customer to use ser-
vices and products efficiently); 3) design for environment
(including environmental concerns at the early steps of
product and service design to eliminate or decrease en-
vironmental wastes associated with the process and de-
sign); 4) product stewardship (considering the “take-
back “law which requires the product manufacturers to
take care of the products and packaging materials at the
end of the product life); and 5) full cost environmental
accounting (taking into account direct costs such as labor,
capital, and raw materials; hidden costs such as monitor-
ing and reporting costs; contingent liability costs such as
costs of fines and remedial action; and less tangible costs
such as public relations and Good will.
Figure 1. Triple bottom line parameters.
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden 375
1.2.2. Social Responsibility
It is the benefit of the business firm, in the long term, to
act as socially responsible corporate [21]. This is the ar-
gument usually stated in the concept of corporate social
responsibility (CSR) which has been in the literature for
decades [22,23]. The CSR concept addresses the crucial
relationship between the society and business. Business
firms should anticipate and act to engage in CSR to ad-
dress the concerns of the community, stakeholders, and
the employees in addition to their profit pursuit.
The social responsibility of corpor ations could be con-
ceptualized from four points of views i.e. economic (ma-
king profit without compromising the stakeholders’ in-
terest), legal (making profit while operating according to
the laws and regulations), eth ical (avoiding activities that
are rejected by society) and the philanthropic response-
bilities (responding to societal demands voluntarily with
the corporation discr e tion).
To address the social injustice in the work place and
improve the working condition, International Standard
Organization (ISO) has designed ISO 26000 for social
responsibility [24]. ISO 26000 is intended to enable
business firms to have positive impact in sustainable de-
velopment. It addresses seven core subjects and many
issues as presented in Table 1.
There are also some arguments against CSR [25,26].
These are: profit maximization (a business firm is respon-
sible to maximize the profit of shareholders and social
concerns should be the issue of government who collects
taxes); lack of expertise (Business firms lack the neces-
sary expertise to address the social issues); competition
(some firms consider that engagement of business firms
in the social problem makes them weak in global compe-
tition, excessive power (business firms have already
economical and social power and they shouldn’t be given
additional responsibility to control and shape the soci-
Table 1. Core subjects and issues of social responsibility
addressed in ISO 26000.
Core subjects Description
CS1 Organizational governance
CS2 Human rights
CS3 Labor practices
CS4 Environment
CS5 Fair operating practices
CS6 Consumer issues
CS7 Community involvement and development
1.2.3. Economic Sustainab ility
Even though business sustainability is currently accepted
to be a combination of economic, environmental and so-
cial performances, economic sustainability is the most
abstract combination of the three pillars of sustainability.
Global reporting initiative (GRI) defined the economic
sustainability as “an organization’s impact on the eco-
nomic circumstances of its stakeholders and on the eco-
nomic systems at the local national and global levels”.
Therefore, the GRI economic sustainability indicators
such as profits emphasize on the economic impact of the
firms on the society and the flow of resources among
different stakeholders [27].
From environmental and social management point of
view, there are two ways to address the issue of eco-
nomic sustainability. The first begins with the issue of
how business can survive and this approach evaluates the
inside of the organization. This view focuses on brand
reputation and corporate sales as a main goal for eco-
nomic sustainability [28]. The second appro ach considers
the economic impact of the organization on the economic
system or on the society from stakeholder point of view.
It investigates how the external environments affect the
organization sustainability.
1.3. Sustainability Indicators of a Business
In 21st century a sustainable company should evaluate its
progress in implementing its sustainability programs.
However, organizing the important information is a
challenge to develop sustainability metrics/indicators.
Concerning the environmental sustain ability, some of re-
commended metrics/indicators are: material intensity,
energy intensity, toxics released per unit of products or
services, and greenhouse gas intensity. Some of indica-
tors of social sustainability are: leadership and employee
commitment, job creation and training program, health
protection and risk management, and addressing gender
distribution in employment program. Similarly, the eco-
nomic sustainability indicators include turnover and net
profit, employee’s financial benefit, firm’s investment
potential, market potential, and funding societal devel-
opmental projects.
2. Methodology
2.1. Study Area
In this study, Konsum Värmland has been studied focus-
ing on sustainability issues. Konsum Värmland is a co-
operative association founded in 1903 and one of effec-
tive food retailing co mpanies in Sweden. The outlets and
subsidiary companies are located within the region of
Värmlands, Örebro and Västra Götalands region. The
stores are located around the city of Karlstad, the biggest
Copyright © 2012 SciRes. JSSM
Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
city in the region of Värmlands [29]. Konsum Värmland
firm has its head office in Karlstad (see Figure 2).
2.2. Data Collection
The necessary data and information on history and status
of KV and its practical activities concerning the imple-
mentation of sustainable development programs were
gathered via reviewing different documents, research
papers and press releases by KV; interviewing decision
makers and other personnel in KV and other researchers
from Swedish University of Agricultural University who
investigated KV. In addition, information regarding the
motivation and challenges encountered by KV during the
implementation of sustainability initiatives was collected
and discussed. To collect primary data in this project, a
questionnaire was designed and sent to responsible per-
son at KV. The answers and related information (such as
important websites where valuable documents are avail-
able) were received through email and telephone co nver-
To identify the pertinent conceptual frame work, a lit-
erature review was conducted. Most of the literature
searches were undertaken using electronic databases via
computer networks of Swedish university of agricultural
sciences and the keywords used were sustainable busi-
ness development, food retailer, environmental friendly
products, fair-trade business, local food, social responsi-
bility, and Konsum Värmland. This study was based
mainly on qualitative case study research method. Triple
Bottom Line theoretical frame work has been used to
analyze the status of KV from sustainability point of
view. Figure 3 presents the graphical representation of
the concept used in this study approach.
3. Empirical Findings
The Swedish food retail sector is more integrated and
concentrated and as the common trend in Europe, the
sector has been owned and run by few actors and owners
of food retailers. Changes in social demographics and life
style of consumers towards a single person household
have an impact on the retailing business. The retailers are
working towards meeting the demands of the consumers
by providing healthier alternative products, home meal
substitutes and ready to consume food items. The Swed-
ish food consumers demand nutritious, fresh and organic
foods. In addition to high quality food items, the con-
sumers demand to know the traceability and environ-
mental issues associated with supply of the food prod-
3.1. Market Structure
The Swedish food market structure is characterized by
low degree of market internationalization and firmly sta-
Figure 2. Geographical distribution of Konsum Väarmland
Figure 3. Conceptual representation of the study approach
used to assess the sustainable business development (SBD)
of Konsum Värmland (KV).
ble market. However, there is increasing competition
because food retailers from other region such as Ahold,
which has 50% percent interest in the major retailers of
ICA and Lidl, have entered into the Sweden food retail
market. To overcome such international competition, the
retailers need to reduce the operation cost, by coordinat-
ing central procurement activities that will definitely
catch the benefit of economics of scale and volume dy-
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden 377
The Swedish food retail and whole sale activity is
controlled mainly by three retailers ICA, COOP, and
AXFOOD (see Figure 4). Altogether they account above
90% of the food retailing market. Regional retailer Ber-
gendahlsgruppen which actively works in southern Swe-
den, covers about 5.7% of the market share.
ICA Group is a food retail company operating widely
in northern Europe. It has around 2125 of its own and
retailer-owned stores in Sweden, Norway, Estonia, Lat-
via and Lithuania. COOP is owned by a cooperative un-
ion, a group known as Kooperativa Förbundet (KF) in
Sweden. KF is a federation of 42 consumer cooperative
societies in Sweden, with over 3 million individual mem-
bers. KV is one of these 42 owners of KF. Coop accounts
for 20.4 percent of the entire Swedish grocery retail sec-
AXFOOD is a group runn ing food r etail an d who lesale
trade in Sweden. It owns about 237 stores and a large
number of proprietors (about 840 proprietors) and runs
stores that are tied to Axfood through agreements. Ax-
food has about 16% share of the food retail market in
Sweden. Bergendahls Gruppen is a company owned by a
family. The company started in 1922, and currently it h as
a food market share of 5.7% in Sweden.
3.2. Characteristics of Konsum Värmland
Konsum Värmland is distinct in Sweden that it involves
both the retailing and whole selling business, provides its
own broadest range of proprietary and locally produced
brands, it has production facilities and ensures quality
that the products meet the requirement of the customers
and helps in strengthening its brand names. In 2010, Ko-
nosum Värmland had a market share of 53.7%, in the
Värmland region. It has 145,000 members (one mem-
ber/house hold), which represent over 90% of the region’s
population. In 2011, it had recorded a turnover close to
Figure 4. Market share of major food retailers in Sweden.
The market share is expressed in percentage of total food
market in Sweden.
3.9 billion Swedish kroner. KV provides fair-trade la-
beled items to consumers. This allows producers in other
areas of the Globe the opportunity to improve their lives.
Many farmers in developing world are struggling to get a
fair price and market for their products. Fair trade works
to improve the economic condition, to fight child labor
and discrimination and promote ecological and environ-
mental protection (ww w.fairt
3.3. Konsum Värmland from Sustainability
Point of View
The findings in this study indicate that there are strong
efforts towards implementing sustainable development
initiatives at both KF and KV levels. The KF works to-
wards sustainable development. In 1899, KF’s aim was
to help its member organizations to sell pure and unadul-
terated/unmodified good s at good prices. It has increased
its effort and in 2009, this was stated (KF, 2011) as “KF
adopts policy on sustainable development, with opera-
tional objectives, among others, mitigating climate
Positive results have been obtained from the efforts of
implementing sustainable development plans. Some of
the major successes of year 2010 were: the climate im-
pact from its own operations fell by 44%; 75% of em-
ployees were satisfied with their work situation and with
the company’s sustainability efforts; the supply of or-
ganic and eco-labeled food items increased by 10%; and
23.6 MSEK was collected to support the poverty reduc-
tion activities of two organizations, “Kooperation Utan
Gränser” and “Vi-skogen”. Since KV is the member of
KF, such achievements of KF are also the achievements
of KV. However the degree of KV’s achievement may
differ from that of KF if investigated at th e KV company
level. Each subsidiary and member company has a re-
sponsibility to live up to the sustainability policy and
goals of KF. As a member of KF, KV has direct respon-
sibility to implement the sustainable development pro-
grams set by KF.
3.3.1. Environmental Engagement
Environmental concern refers to activities such as waste
reduction, efficient energy usage, emission reduction, ef-
ficient water usage and promoting Biodiversity. KV is
working on strategies how to lower power usage and re-
frigerator leak, waste and green gas emission, operating
costs, and to improve the waste management procedures. Energy Consumption
Over the recent years KV has managed to reduce the
energy usage and refrigerator leakage. For example it has
implemented a new sustainable store design that are en-
vironmentally friendly and energy efficient. KV has re-
portedly improved the efficiency of electricity consump-
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
Copyright © 2012 SciRes. JSSM
tion from lighting, heating and cooling. Waste Reduction, Recycle and Reuse of
Packaging Materials
KV has gained good experience than its competitors in
managing plastic and paper waste such as collecting and
sorting of packaging and other recyclable materials like
corrugated cardboard cartons, plastic packaging and plas-
tic film. The collected materials are sent to KV Värm-
lands environmental station, where, specially trained
staff makes quality assessment before transporting to the
final recovery process.
KF members have tightened their commitment to re-
duce their environmental impact on the climate and have
set a goal to decrease the carbon emission from their ac-
tivities up to 40% by year 2020 taking year 2008 as ref-
erence. To get better result on environmental perform-
ance the coop invests more on efficient energy technol-
ogy focusing on reducing energy consumption of stores,
freight transport and coolants and refrigerators plants.
The main reasons that increase the emission from
transport sector of KF member firms are longer winter
season with heavy snow, longer transport distance, and
increased transport activities to avoid delay in supply
chain. The second largest greenhouse gases emissions in
business operations come from the refrigerator plant in
stores and at the terminals and this emission should be
reduced. For example, in the case of KV, the leakage
decreased during the year 2011 from 13% to 10%.
Leakage has been common in the retail industry and so-
lutions are underway to overcome the issue. Environmental Friendly Food Products
In years 2011 and year 2012, COOP retailers have been
branded by Swedish consumers as the most sustainable
brand in Sweden. KV has KRAV certified grocery stores
offer consumer thousands of organic, natural and envi-
ronmental friendly products increasing the organic
choices such as KRAV certified products (
KRAV stands for sound natural environment, good
health, social responsibility, and animal welfare. The KV
stores provide Swedish broadest range of sustainable al-
ternative products in the form eco-labeled, fair trade la-
beled products that are free from chemical pesticides, fer-
tilizers and genetically modified organisms. Product Quality and Brand Names
Food suppliers of KV should follow sustain able business
practices. They have to provide documents and imple-
ment self control and self inspection practices that in-
cludes cleaning schedule, temperature control, personnel
hygiene, pest control, staff training, water supply etc.
Furthermore, suppliers have to document and implement
total quality management in accordance with ISO 9000,
hazard analysis and critical control points (HACCP) and
British retail consortium (BRC). The contractor shall
comply with industry agreements regarding the origin
and the European parliament and council regulation (EC)
no. 1760 2000 on the labeling of beef and beef products
and other Swedish leg islation on the hand ling of food.
Konsum Värmland is well known brand in the region.
In addition to its top brand-name, Konsum Värmland, it
uses other brands such as Värmlandsgris (sourcing pigs
from 32 farms in Värmland), Värmlandslamm (sourcing
sheep from 28 farms in Värmland), Värmlandskött
(sourcing cattle from 14 farms in Värmland), Nästgård
(sourcing products mainly from Värmland) and Svenska
favoriter (supplying meatballs) (see Figure 5). Animal Welfare and Meat Quality Control
KV controls animal welfare and meat quality. It performs
inspection in cooperation with independent and compe-
tent organizations such as Agricultural Society of Värm-
land and Animal Rights Alliance. For Example in 2009,
four of the farms that deliver pigs to Värmlandsgris were
identified as farms that undermined animal welfare issues
and banned from supplying to Värmlandsgris. The farm-
ers are also very cooperative to such quality controlling
The aforementioned local brands (see Figure 5) which
supply animals to KV shops are known for their high
quality meat which has been guaranteed due to the fol-
lowing factors:
The farms are inspected and open to be visited by
consumers and workers in the abattoir.
Animal handling on farm and during transport fol-
lows the Scan AB’s animal care program and doesn’t
affect the welfare of animals.
Figure 5. Local brand names of Konsum Värmland (
Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden 379
Only well matured animals are supplied for slaughter
All animals are kept untied.
3.3.2. Soci al E ng agement
For more than 100 years, the values of KV reflect im-
portant issues like member ownership, honesty, innova-
tion, and concern for human and environment. In addi-
tion to working towards members’ benefits by providing
products with good quality and relatively less price, KV
promotes the suppliers commitment towards environ-
mental and social practices and strengthens stakeholders
network that encourages the local farmers. Fair Trade Products
Konsum varmland supplies and sells a number of fair-
trade marked products and the sales of fair-trade goods
have been increasing from year to year. Fair trade offers
consumers a powerful way to reduce poverty through
their everyday shopping. For example, currently COOP
retailers in Sweden have approximately 100 fair trade la-
beled items such as coffee, chocolate, tea drinking cho-
colate, sugar, jam, honey, vegetables, pasta and oil. Sup pl i er’ s Stan dar ds and Business Et hi cs
For customers who seek healthy habits and care about
how goods and services are produced, the obvious choice
is retailer that supplies environmentally friend ly products.
Product safety of both food and non food items is impor-
tant. Hence, the KV stores require their suppliers to meet
specific requirements and also recognize that the signifi-
cance of their supplier commitment to environmental and
international labor practices. Pol i c y fo r S u ppl i e r
Suppliers of KV should maintain equal opportunity of
access to job and right to organize; avoid child labor;
avoid discrimination on job (based on the sexual orienta-
tion, disability, race, gender, religion, marital status, po-
litical affiliation or union membership, and HIV positive);
create good working condition; pay minimum wages; and
prepare acceptable work schedule. Community Activity
KV participates actively in developmental activities of
the region. KV established the Värmland Environment
Fund in 1994 which helps to stimulate environmental
activities in the Värmland region. This fund is financed
by saving 0.05 SEK from each plastic bag sold, and the
fund is open to association, companies or individuals
working in the area of implementing environmental pro-
grams. During years 1995-2003, this fund financed dif-
ferent environmental projects that mostly engaged young
people in Värmland. KV also gives financial support to
short and long term environmental projects planned to
increase the awareness among children and youth. For
this, it works with universities and schools in the region. Members and Employees of KV
KV has been expanding in number of members which
has increased by 44% over the recent decade. At the end
of 2011, it had around 147,000 members. However, the
number of employees shows decrease in recent years. For
example it decreased from 1800 (in 2005) to 1471 in
2011 most probably due to technological advancement.
Considering the gender distribution of employees,
63% and 66% were women in 2010 and 2011 respec-
tively. Similarly, 46% of the executive management and
33% of board members were women in both 2010 and
2011. Figure 6 indicates the gender distribution of em-
ployees and leadership for recent years.
3.3.3. Economic Engagement Financial Performance
Considering the economic performance, the revenue (sa-
les) of KV has been increasing. It increased by 30% from
2004 to 2008. Its gross profit was 812 MSEK (million
Swedish kronor) in 2010 and 744 MSEK in 2011 (see
Table 2). In year 2011, KV has paid back dividend of 72
MSEK to its members. It also increased its investment
activities. In 2011 alone, it invested about 121 MSEK in
building new stores to expand their market share. This
enabled KV to achiev e an influx of members to the asso-
ciation. The market coverage of KV in the region in-
creased from 39% in 1991 to 54.6% in 2008 (see Table
3). Table 2 and Figure 7 indicate the economic per-
formance of recent years. Economic Potential for Human Development
In cooperation with the region of Värmland and the em-
ployment services, Konosum Värmland has a scheme to
offer apprenticeship to local young people with the aim
of creating job opportun ities and strengthen the supp ly of
expertise in the region. Through its investment potential
Figure 6. Gender distribution of KV leadership and em-
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
Table 2. Recent financially information of KV and some food retail firms.
2011 2010
Company Description
MSEK % Net sales MSEK %
KV Net sales 3532 3649
Gross profit 744 21.1 812 22.3
Retail oper ating expenses 790 22.4 804 22.0
Selling expense 776.6 22.0 795.2 21.8
Administration cost 13.02 0.4 9.17 0.3
Other operating costs - -
Pr ofit after tax 8.4 0.2 40.4 1.1
ICA Net sales 95,179 93,860
Gross profit 13477 14.2 13473 14.4
Selling expense 8435 8.9 7953 8.5
Administration cost 2809 3.0 2819 3.0
Other operating costs - -
Pr ofit after tax 1395 1.5 547 0.6
AXFOOD Net sales 34,795 34,260
Gross profit 4918 14.1 4673 13.6
Selling expenses 2177 6.3 2121 6.2
Administration cost 1736 5.0 1564 4.6
Other costs - -
Pr ofit after tax 895 2.6 862 2.5
Ahold Net sales 30,271 29,530
Gross profit 7921 26.2 7920 26.8
Retail oper ating expenses 6466 21.4 6471 21.9
Pr ofit after tax 1017 3.4 853 2.9
Source: [30-33].
KV promotes local and regional economic growth. It
invested about half a billion SEK during 2004-2008
while it invested 121 M SEK only in 2011 (see Table 3).
This makes it to be competent in the market and potential
firm that promote economic development of the region. Economical Development for KV Members
The basic mission of KV is to make economic gains for
its memb e rs. Th e members’ re fund va ries fr om 1 % t o 5 %
and will never be below one percent and awarded ac-
cording to the purchase they have made in KV stores. In
year 2011, it awarded 72 M SEK to the members. KV
also has member bonus scheme which is important, es-
pecially for average families who buy most of their pur-
chases from KV stores. The more the member purchases
from KV stores, the higher the bonus.
3.4. Progress of KV in Implementing
The progress of KV in implementing its sustainable
business development strategy was investigated using su-
stainability indicators. The investigation was carried out
considering the three dimensions of SBD. Table 3 pre-
sents the summary of su stainability assessment, based on
TBL and using the major sustainability indicators.
3.5. Motivation and Challenges
The managerial commitment and organizational core-
values have played an important role in pursuing the en-
Copyright © 2012 SciRes. JSSM
Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden 381
Table 3. TBL based assessment of KV’s progress in implementing sustainable business development practices.
Sustainability dimension Important sustainability indicators identified for Konsum Värmland
Setting a goal to reduce CO2 emission from its activities by 40% in 2020 when com pared to 2008 reference value
Assigning more expenditur e on re ducing energy consum ption
Reducing leakage from refrigerator plants in stores
Having KRAV certificate
Installing (in new shops) coolers and freezers which run in environmental friendly manner
Promoting the supply of local, environmental fr iendly , quality and fresh products
Promoting the concept of waste minimization at all levels starting fr om the production level
Environmental Sustainability
Promoting animal welfare policy at all levels of supply chain
Incorporating the concepts of sustainability in the values and m ission statement of KV
Commitment of top management to implement sustainability programs
Fair gender distribution i.e. the 66% of em ployee, 46% of the management, 33% of board members and 44% of
supervisory board (Förvaltningsråd ) are women
High acceptance by consumers who have branded KV as most sustainable food retail company in the region in 201 1
Educating its employees and customers about sustainability issues
Following fair-t rade business concepts and currently
KV is a member of KF which produces sustainability report
Promoting the suppliers comm itment towards environmental and social practices
Increasing in number of m embers
Wo rking towards members benefits by providing products with good quality and relatively less price
Arranging members m eetings and custom ers panel, gathering opinions and quest ions to use effectively for sustain-
able business development
Strengthening stakeholder s network that encourages the local farmers
Active participation in societal development through providi ng funds for dif ferent environmental and societal de-
velopmental projects
Social Sustainability
Reducing the absence due to sickness e.g. reduction from 9% (in 2003) to 5% (in 2009)
Increasing revenue (sales). It incr eased by 30% from 2004 to 2008
Increase in market coverage in the region. E. g. it increased from 39% in 1991 to 54.6% in 2008
Increase in investment. E.g. it invested about half a billion SEK during 2004-2008. It invested 121 M SEK in 2011
which is about 4 times what it invested in 2010
Promoting local and regional economic growth
KV has been competitive in market for over 100 years
Economic Sustainability
Promoting quality products with fair price
vironmental and social responsibilities. KV strives for
member’s economic benefit and sustainable consumption
which in turn lead towards sustainable business devel-
opment. For KV, members’ willingness to preserve the
cultur e and values of th e cooperative and the consumers’
awareness about the future trends are among major drives
to embrace sustainability.
There are challenges facing KV to reduce the envi-
ronmental impact of their operation. Product price increases
as quality of produce an d sustainability of production sy-
stems increase. The supply of local product varies sea-
sonally so that it is difficult to satisfy customers need
throughout the year. Long winter time with much snow
increases the logistics cost and emission values. Different
actions taken to reduce environmental impacts of KV ac-
tivities require large scale investments. In addition to this,
quantifying generated emissions and other wastes and
preparing sustainability report require skilled manpower.
Copyright © 2012 SciRes. JSSM
Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
Figure 7. Net sales of KV over the recent years. It shows that the sales increased from 2004, and remains nearly constant after
Greener products are often more costly to produce, and
this higher price negatively influences consumer deci-
sion-making and reduces potential sales of quality prod-
ucts. Supplying the local products is associated with
seasonal problem. It is observed that KV stores have dif-
ficulties in meeting a changing demand, and performing
all packaging services when the demand increases. The
cost of replacing freezers and refrigerators in food retail-
ing business needs a lot of investment and longer time
span to reduce the env ironmental impact.
4. Discussion
Contemporary food retailers understand the need to eva-
luate their operations and address the fact that sustainable
business operation goes beyond their mere goal of profit
making. There is increasing agreement that retailers have
the power to influence the sustainability issues both up-
stream and downstream of their supply chain. However,
integrating sustainability initiatives into their business
action plan is not an easy task, especially with the retail-
ers that have a number of supply networks and products
[34]. The findings in this study indicate that KV has in-
tegrated sustainability principles into its business opera-
tions through: incorporating sustainability issues into its
mission, values and strategic development plans; provid-
ing environmental friendly and quality food products
with reasonably less price; strong commitment of lead-
ership towards sustainability issues; increasing awareness
of employees, shareholders, stakeholders, and customers
about sustainability issues; and maintaining financial
profit for shareholders and promoting economic and so-
cietal development of the region.
From environmental point of view, KV’s brand names
promote local products (most of farms are within about
75 - 100 km radius) which are easily traceable, require
short transport distance and time, and can generate values
that attract the customers. KV has KRAV certified gro-
cery stores indicating that the food products are produced
using less energy, less fertilizers, less pesticides and less
herbicides unlike large scale and mechanized agriculture
which use more chemical inputs and pesticides [35,36].
The KF member firms recognize that the environmental
effects of their transport activities are huge and they h ave
been reviewing the possible logistics solutions. This in-
dicates that for the coming years, finding best logistics
solutions will be one of the main agend as of th e KF part-
ners to reduce the environmental impact and increase
their economic benefits.
Regarding social sustainability, a company should have
critical success factors such as visionary leadership, fle-
xibility to change s and openness to key stakeholders [12 ].
The leadership of KV is visionary and has commitment
to plan and implement sustainable business development
practices. It introduced incentive and possible low price
products to employees, stakeholders and customers. It
also implemented fair gender distribution principle and
training programs on sustainability issues (see Figure 6
and Table 3). Zetterberg [37] conducted a value-based
assessment of KV and mentioned that KV has estab-
lished values-based thinking and the strong values cre-
ated by KV can drive value for sustainable business. The
current study also confirmed the findings of Zetterberg
[37]. KV works to improve health condition of its work-
ers. In order to maintain their market share and remain
competitive in the global market, companies must im-
prove the ethical standards and their images, improve the
safety concern of personnel, avoid legal claims, respond
and cooperate with government regulators.
KV sells fair-trade labeled products sourced from de-
veloping countries and this contributes to improved liv-
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Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden 383
ing and working condition of farmers in developing coun-
tries. Elder et al. [38] reported that about 1.2 million
producers in Latin America, Africa, and Asia supply
their products to Fair-Trade certified organizations that
sell products across North America and Europe.
Regarding economic sustainability, the core values of
a business company are not solely to make profit. The
economic growth o f business firms should o ccur without
causing social and environmental damages. The finding
in the current study indicates that KV recognizes that
sustainable business development demands to fulfill the
short and long term interest of different stakeholders sat-
isfying the spirit of su stainability. KV has achieved prof-
its for all of its members and at the same time it practi-
cally has been financing different projects on sustainable
development programs in the Värmland region. From
Table 2, the profit-after-tax of KV is less when com-
pared to that of others such as ICA, Axfood, and Ahold.
For example in 2011, the profit after tax (as % of net
sales) was 0.2% for KV while it was 1.5%, 2.6%, and
3.4% for ICA, AXFOOD, and Ahold respectively. How-
ever, KV is expanding in terms of poten tial market, num-
ber of members and customers’ satisfaction which in turn
strengthens its competiveness and sustainability.
Variety of factors motivates retailers to be engaged in
non core business activities (such as environmental and
social issues). These include new legislation, availability
of capable investors, pressure from NGO and govern-
ment bodies, media attention and information communi-
cation technologies. These factors have forced food retail
outlets to show in terest and commi t ment in t he so cial an d
environmental impact of their operation [23]. Some of
major motivating factors can be expressed as financial
factors (long term investment), stakeholder’s expecta-
tions (such as consumers willingness to buy environ-
mentally friendly products), maintain reputation, top le-
vel management initiative, and societal factors. As indi-
cated in Section 3.5, some main motivations have been
identified for KV. Especially the managerial commitment,
and members’ willingness to preserve the culture and va-
lues of the cooperative and the consumers’ awareness
about the future tren ds enab le KV to be comp letive in the
region’s food retail market. KV recognizes that its in-
vestment on environmental dimension has huge pay offs
in the long term.
Food retailers face a number of challenges and risk
while trying to implement sustainability initiatives be-
cause of the market dynamics and the competition they
face around their environment [39]. Some of the chal-
lenges are: financial challenge (the cost associated with
the implementation of sustainability programs), market
challenge (consumers attitude towards sustainable prod-
ucts and price of the products), reliability of supply (dif-
ficulty in supplying the products in environmentally
friendly and socially sound way [40], managerial barri-
ers (lack of leadership involvement in incorporating sus-
tainability issues in the core values at th e corporate level).
Such challenges are also noticed in the case of KV as
indicated in Sect i on 3.5.
This study revealed that small volumes and higher
production costs are two main factors that force COOP
stores to increase prices of eco-products than ordinary
products. Usually, actions to lower the environmental im-
pacts of retail activities require large scale and long term
investments. For example, replacing old refrigerators and
freezers in stores and installing new infrastructures in
new stores are costly investment in short term, but have
considerable positive impact in long term.
5. Conclusions and Recommendation
This study was initiated with the aim to assess the sus-
tainable business management of a food retail business,
Konsum Värmland (KV), operating in Sweden. The nec-
essary data and information on history and status of KV,
values and strategy of KV towards sustainable business
development, practical activities of KV that indicates the
implementation of sustainable development programs
and the motivation and challenges encountered KV dur-
ing the implementation were gathered, interpreted and
discussed. The implementation of sustainability initia-
tives was assessed mainly based on triple bottom line
sustainability theory using identified sustainability indi-
cators in environmental, social and economical dimen-
The findings indicate that KV is a food retail firm
which has CRAV certified stores and currently owned by
145,000 members. It has been running food retail ser-
vices successfully for over a century. It incorporated the
sustainability issues into its mission and values. It has
been implementing sustainability programs in all the
three dimensions i.e. environmental, social and economic
dimensions of sustainable development. It provides en-
vironmentally friendly and quality food products at rea-
sonably less prices. It sources its food items from suppli-
ers known by their local brand names such as Värm-
landsgris (supplying pigs), Värmlandslamm (supplying
lambs), Värmlandskött (supplying cattle), Nästgård
(supplying local products) and Svenska favoriter (sup-
plying meatballs). KV perceives that integrating sustain-
ability principles into its business operation satisfies the
long term interest of its shareholders and stakeholders.
This enables KV to be better positioned in its long-term
market growth, profitability, legitimacy to operate and
enhance its brand image in Värmland region of Sweden.
The major drives for incorporating sustainability ini-
tiatives in KV’s business operations are leadership and
employees’ commitment, organizational core values, mem-
bers’ willingness to preserve the culture and values of the
Copyright © 2012 SciRes. JSSM
Assessing the Sustainability of Food Retail Business: The Case of Konsum Värmland, Sweden
cooperative and the consumers’ awareness about the fu-
ture trends. On the other hand the major challenges to
implement such sustainability initiatives are the increase
in product price due to quality of produce and sustain-
ability of its production systems; increase in logistics
cost and emission especially during long winter time
with much snow; the seasonality of local product so that
it is difficult to meet customers demand during shortage
of supply; and high cost of large scale investment in or-
der to address the sustainability issues. KV has not pro-
duced yet comp rehensive sustainability report.
In this study the sustainability ind icators were not well
quantified mainly due to lack of detailed information and
data at KV level. Especially, data on emission, waste
generation, and efficien cy of utilization of resources such
as energy, water, paper, vehicles and others were not
obtained. Therefore further detailed study that promotes
sustainable business development of KV with rich quan-
titative data is recommendable. This future study should
also focus on reducing the major challenges by designing
and implementing more effective approaches of address-
ing sustainability issues in KV and other food retail
business firms.
6. Acknowledgements
The authors would like to thank personnel at Konsum
Värmland and Coop Inköp & Kategori AB for providing
valuable information and sources of data during answer-
ing the interview questions.
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