Sustainable commercial growth depends on people in poverty becoming better off

In a Greggs outlet store, shoppers can pick up a sandwich for 55p or a baguette for £1.05. Four sausage rolls are £1.55 and a pack of jam doughnuts is 55p.

Everything’s a day old, of course. Such is the turnover of turnovers. But while the chain could have chosen to dump its unsold goods in a bargain bin in the corner of its regular stores, it’s making those pastries work a bit harder.

The 30 Greggs Outlets across the UK are located in areas of entrenched deprivation. And some of the profits from selling what would otherwise be food waste are pumped into community organisations and local food banks.

Greggs says it’s committed to helping those on low incomes get through the cost-of-living crisis. Those in poverty are the ones who spend the biggest proportion of their money on food and other essentials, after all. Crucially though, Greggs Outlet is still a retailer. Customers browse, choose and pay just as they would anywhere else. It’s a bargain buy, not a charity handout.

But can that be all there is to it for a retail giant like Greggs? Among the various aims listed on Greggs’ Better Business page is this one: “We want to be an inclusive employer that our colleagues recommend to their friends”.

They go further, saying that a diverse workforce makes their brand more welcoming. “If our colleagues are representative of the communities Greggs serve, we can better understand our customers,” they say.

By being a good employer, they aim to make future recruitment easier. With a diverse workforce, it’s hoped the customer experience will improve. And with Greggs Outlet, the company aspires to create brand loyalty by taking their cheapest products to the people who need them most.

Customer wellbeing

They’re not alone, of course. Small and medium-sized businesses are often among the first to help out in their communities, as we saw during the worst of Covid. They see problems, and they try to fix them. They instinctively care about their customers’ wellbeing, and they want them to be better off. The business depends on it.

Like Greggs, Timpson is another household name that’s doing good from the high street. From recruiting staff directly from prisons to dry-cleaning a jobseeker’s suit for free, the chain has become known (and respected) for its efforts to tackle poverty in a sustainable way.

Director of diversity and inclusion at Timpson Group, Darren Burns, is clear that their model is business, not philanthropy.

“We’re not a charity, we’re a commercial business,” he says. “Employing ex-offenders has proved to be very good for business. They’re loyal and they stay with us longer. Statistically they’re more honest too. They’re very reluctant to betray the trust we’ve given them.”

And with life experience comes resilience, he says. 

“Anything we can throw at them, they can do it standing on their heads. Now we’re looking to employ more care-leavers, refugees, military veterans and neurodiverse people. Having a more diverse set of backgrounds adds so much to our business and makes it a more fun and rewarding place to work.”

Despite their size, Timpson and Greggs have recognised that using business to help tackle poverty has the potential to open up new markets for them.

Making it social

‘Food deserts’ spring up when communities are underserved by big retailers, meaning those without transport and with the least to spend on groceries are stocking up in convenience stores. They pay the price, not only with their wallets, but with choice and freshness.

Government grants and tax breaks could help of course – but so could business. Everyone in these communities is a potential customer after all. Even if those potential customers are living in poverty right now, they might not be next year. That Timpson customer with the freshly cleaned suit could be about to start a new job and have a whole lot more disposable income in their wallet.

One sector that’s been striving for impactful business is social enterprise. Making money while making a difference is what they’re all about, so it’s reasonable to assume there are lessons for traditional businesses looking for a slice of the socially responsible pie.

Like family-owned and local businesses, social enterprises are well tuned into the wellbeing of the communities they serve. It’s fair to say that big business does have to work harder to achieve this level of connection.

Tim West, founder of impact economy news network Pioneers Post, says that businesses are incentivised towards short-termism and profit maximisation. Often, this can come at the expense of social responsibility.

“This isn’t just about saying businesses need to be nicer,” he says. “But being more socially responsible is actually more sustainable and often can produce more sustainable, robust profits.”

Social enterprise isn’t immune from short-termism and the need to produce profit, he says. The difference, though, is that with social enterprise the impact should always be front and centre of decision-making.

Housing providers too, he says, are well placed to move further into the social impact space as a model for future business.

“They’ve got a very, very solid business model,” he says. “But they could diversify into more social enterprise within the communities where they operate. They could inspire and support, and put small amounts of money behind people in poverty to enable them to get back into the economic system.

“I know a social enterprise that can employ and train tenants, and there are also social enterprise models that can support tenants through difficult times. Whether it’s mental health issues or alcohol and drug problems, there are a number of social enterprise solutions. Ultimately, they’re about those tenants having the economic wherewithal to be able to continue to pay their rent or even moving into a place of their own.

“With the expertise and the social values that lie behind housing associations, they really have an opportunity to do something quite powerful.”

However, it’s important to remember that many housing providers are already doing great, innovative things to tackle poverty in their communities. As well as the moral responsibility, their business brains will recognise the imperative to help their tenants become better off and avoid failed tenancies.

As the cost-of-living crisis continues, more and more people are being dragged into hardship for the first time. It shouldn’t be too much to ask, therefore, that business moves towards a model where poverty impact becomes baked in.

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