Our aim is to have a significant impact on obesity, much greater than has been achieved by existing policies such as the Soft Drinks Industry Levy, which has been estimated to have reduced calorie intake among the population with excess weight by 28 kcal per person per day.7 We believe this policy could take us half the way towards our goal of halving obesity. 

We have estimated that our retailer target could reduce calorie intake among overweight and obese populations by approximately 80 kcal per person per day [9].

A sustained calorie reduction of this magnitude over a three-year period would lead to an approximate 23% reduction in the prevalence of obesity in the UK (from 28% to 21%) and a 14% reduction in people living with excess weight (from 64% to 55%) (see technical appendix for more detail) [10].

This would translate to around four million fewer people living with obesity in the UK and around £20 billion in annual cost savings to society [11].

To achieve this impact, our modelling suggests that one would need to set the target at the following level (see Figure 3) [12].

Figure 3: proposed health target for grocery retailers

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Importantly, we can achieve this level of impact by setting targets at a level that is similar to that already achieved by today’s ‘best’ players.

This approach not only seeks to achieve impact and parity across the sector, but also rewards those businesses that have already made significant efforts to prioritise health. Our proposed target is ambitious yet achievable. The level at which the target is set could be altered, although this would affect the scale of impact achieved. Figure 4 shows how retailers are currently performing against this target, and the scale of change required to achieve it.

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Figure 4: target and current sales weighted (in kg) converted NPM score by retailer

Line graph showing the target and current, based on 2019 data, sales weighted average calorie density across a whole food product portfolio for each of the 11 largest retailers in Great Britain. Some retailers are already very close to the calorie density targets while others have further to go.

A key benefit of this policy is the flexibility it gives retailers to achieve targets through whichever mechanisms suit their business model. 

In our modelling we have assumed that this would include a rebalancing of sales towards healthier food and product changes through reformulation or innovation (see technical appendix). We have only recommended options that do not reduce the total value of food products sold, to illustrate that it could be possible to implement this policy without impacting total sales. This is the best measure we have available for commercial impact [13].

The ambitious yet achievable level at which the target is set, and the flexibility retailers have to achieve targets, mean that consumers would experience minimal changes to their shopping in response to retailer activities, as shown in Figure 5. Importantly, as a result of retailers deploying their reformulation, stocking, promotion, placement and advertising mechanisms to make healthier foods the easiest option, consumers can make these changes with minimal willpower and at no extra cost. 

The basket at Figure 5 is an illustrative example to show what a basket could look like, but this shift in sales could be achieved in numerous ways.

Figure 5: illustrative example of what small and positive changes could look like to a consumer’s shopping following retailer action to meet targets

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To appraise the broader economic costs of targets to retailers and consumers, we commissioned an economic assessment of the policy. 

This assessment found that the proposed target should not have a significant impact on either the costs to retailers or the costs of consumers’ shopping baskets.

This is particularly true when compared to other policies, such as new taxes, which are often passed through to the consumer to some degree. Business costs will be limited because retailers have the flexibility to adapt their existing practices and operations most cost effectively, such as making strategic stocking and marketing decisions, reformulating unhealthier products, or altering their store layouts. While the policy will incentivise businesses to modify these practices to prioritise health, it is not generally expected to increase their overall cost if a suitable transition period is given. Furthermore, due to the highly competitive nature of the grocery retailer sector, where many retailers are already close to compliance with the target, it is unlikely that a business would pass on any costs that are incurred to the consumer. For more information, see the economic assessment.

[9] Our model assumes that calorie purchases will only change for the excess weight population (people living with overweight, obesity and severe obesity). Across the whole population, we estimated an average decrease in calorie purchases of 50 kcal per person per day (see technical appendix for more detail).

[10]  An 80 kcal reduction can reduce obesity prevalence by 23% despite 216 calories being required to halve obesity because of the non-linear relationship between calorie deficits and population obesity prevalence, meaning progressively larger calorie deficits are needed for larger shifts of the BMI distribution (see technical appendix for more detail).

[11] Calculation based on Frontier Economics modelling of £97.8 billion annual cost of adult obesity to society, which includes estimated costs from NHS, social care and lost productivity, and wider costs to the individual calculated using Quality Adjusted Life Years (QALYs) modelling.

[12] The impact on obesity from a target set at this level would vary depending on the degree to which retailers prioritise calorie density reduction to meet the NPM target. Retailers could also choose to improve their NPM scores by improving other nutrient components of products, such as salt or fibre, reducing the impact on obesity but still producing similarly significant public health improvements (see technical appendix for more detail).

[13] We recognise this is an imperfect proxy measure as it does not consider relative profit margins of different products as we did not have access to this data. It also assumes that reformulation has no impact on demand nor price of a product (see technical appendix for more detail).

Authors

Lydia Leon

Lydia Leon

Lydia Leon

Senior Analyst, healthy life mission

Lydia works as a senior analyst in the healthy life mission team.

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Husain Taibjee

Husain Taibjee

Husain Taibjee

Analyst, healthy life mission

Husain joined Nesta in 2022 as an analyst and will help to deliver Nesta’s healthy life mission.

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Lauren Bowes Byatt

Lauren Bowes Byatt

Lauren Bowes Byatt

Deputy Director, healthy life mission

Lauren is the Deputy Director of the healthy life mission.

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Hugo Harper

Hugo Harper

Hugo Harper

Mission Director, healthy life mission

Hugo leads Nesta's healthy life mission.

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Elena Mariani

Elena Mariani

Elena Mariani

Principal Data Scientist, healthy life mission

Elena is a principal data scientist for the healthy life mission.

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Isabel Stewart

Isabel Stewart

Isabel Stewart

Data Scientist, Data Analytics Practice

Izzy is a Data Scientist working in the Data Analytics practice.

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Jessica Jenkins

Jessica Jenkins

Jessica Jenkins

Senior Policy Advisor (Health), Rapid Insights Team

Jess is a senior policy advisor in our Rapid Insights Team (RIT).

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Caitlin Turner

Caitlin Turner

Caitlin Turner

Senior Analyst, healthy life mission

Caitlin joins Nesta as a senior analyst in the healthy life mission.

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