Chapter 3: Corporate Social Responsibility in the German Food Retailing Industry

German food retailers face a saturated market that is characterized by a high competition environment, dominated by four big retailers. Discounters represent the most important retailing format and German food retailing is often characterized as being “cheap and cheerless.” Retailers offer low-price environments for their customers, because Germans are among the most price sensitive and price-oriented consumers across the world; as a consequence, margins are extremely low. On the other hand, German consumers have the longest tradition worldwide of behaving ecologically and being societally friendly. Being “green,” caring about the ecological footprint, the impact of their own behavior on others, has been for decades the mainstream rather than the exceptional case in Germany. This all leads to all German retailers struggling with the “contradiction” of very price-oriented customers that expect retailers to be sustainable in all possible ways. This chapter discusses how German food retailers respond to these requirements. It presents retailers’ corporate social responsibility (CSR) strategies and activities with regard to the CSR domains of environment, non-domestic operations, product, community support, employee support, and diversity. While all major German retailers have established a high number of CSR activities among all six domains, they often focus on measures that not only improve their CSR image, but also lead to cost reduction by improving efficiency (e.g., reducing energy cost, streamlining supply chains, or improving logistics).