STAKEHOLDERS
This material references Disclosures 102-40, 102-43, 102-44 of GRI 102: General Disclosures 2016
SUSTAINABILITY
Following our commitment to continually improve our sustainability strategy, we keep a close touch with our stakeholders, that is, with those groups or individuals who represent economic, environmental, and social interests, and who, as a result of their actions or the actions of the Company, may affect us or be affected, directly or indirectly.
The main stakeholders that our Management has identified, as well as a description of topics of interest, means of interaction that the Company uses to notify and/or inquire about its activities and related departments that address the respective groups are set forth below:
At Chedraui, we are aware that in order to uphold our strategy of always offering high-quality products at the lowest prices, it is imperative to maintain solid relationships with our more than 2,200 suppliers, whose reliability and efficiency in delivery constitutes one of the Company’s cornerstones.
In addition, with the purpose of contributing to the conservation of the seas and bodies of water through its purchasing decisions, Grupo Chedraui announced last October, during the Latin American Summit on Sustainable Fisheries and Aquaculture, its purchasing policy for sustainable fishery products, thus becoming the first supermarket chain in Latin America to join this initiative. In this way, the Company will seek to source fish and seafood (in the categories of fresh and frozen, domestic and imported, wild and aquaculture) that come from:
- • Fisheries or farms certified under globally recognized standards, rated green or yellow by the Seafood Watch guide; or
- • Fisheries or farms that are part of a fisheries or aquaculture improvement project (FIP/AIP).
It is important to mention that Mexico division operations do not depend on any particular supplier, as during 2020, no single supplier or group of suppliers accounted for more than 4.0% of total product purchases. Likewise, purchases of imported products made up approximately 1.7%.
Main Suppliers
| Business Name | Share of total purchases |
|---|---|
| Marcas Nestlé S.A. de C.V. | 3% |
| Kimberly Clark de México S.A. de C.V. | 3% |
| Comercializadora de Lácteos y Derivados, S.A. de C.V. | 3% |
| Colgate Palmolive S.A. de C.V. | 3% |
| Sigma Alimentos Comercial S.A. de C.V. | 2% |
| Procter & Gamble México Inc. | 2% |
| Bimbo S.A. de C.V. | 2% |
| Unilever de México S. de R.L. de C.V. | 2% |
| Comercializadora Pepsico México S. de R.L. de C.V. | 2% |
| Cervecería Modelo de México, S. de R. L. de C.V. | 2% |
In the United States division, GSC Wholesale, LLC was the most important supplier, accounting for approximately 24.5% of total products purchased during 2020.
Thanks to the concurrent operations that many of our Mexican suppliers carry out in the United States, our stores operated without direct imports from Mexico, meaning that all products sold in our U.S. stores are domestic.
EMPLOYEES
This material references Disclosures 102-8, 102-16, 102-17 and 102-41 of GRI 102: General Disclosures 2016, 103 of GRI 103: Management Approach 2016, 401-1 of GRI 401: Employment 2016, 403-1 of GRI 403: Occupational Health and Safety 2018, 404-2 of GRI 404: Training and Education 2016, 405-1 of GRI and 405: Diversity and Equal Opportunity 2016
The Company’s growth and success is attributed to the commitment and dedication of our team of collaborators, who, with their vast preparation and sense of responsibility, make up our main asset in an industry where customer communication is vital.
At yead-end 2020, our workforce consisted of 52,149 employees, of which 90.4% worked at the stores, 4.6% in administrative areas, and 5.0% in distribution centers, excluding independent contractors such as third-party employees who manage certain operations in the organization.
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We Contribute to the Well-being of Our Employees and Customers
With the outbreak of the SARS-CoV-2 virus in Mexico early 2020, at Chedraui we took it upon ourselves to collaborate in the prevention of contagion in the communities where we operate, as well as to provide alternatives to guarantee the safety of our employees, customers, and other stakeholders. Among the actions we deployed to meet this objective are:
- • All employees are provided with the necessary protective equipment (mask, anti-bacterial gel, and gloves)
- • Installation of transparent plastic at sales points for greater protection of our customers and employees in the checkout area
- • Installation of signage to promote compliance with social distance measures inside and outside our stores, which must be abided by without exception at all times while inside and when entering the stores
- • Establishment of access controls and health checkpoints at entrances, requiring people wishing to enter the stores and CEDIS to clean their hands with anti-bacterial gel, use the sanitizing mat, and check their temperature
- • Hygiene measures were reinforced in stores, offices and CEDIS
- • In general, all the protocols required by local authorities were successfully implemented
- • Strengthening of our e-shopping platform and home delivery service to alleviate store traffic, as well as promoting the pick-up option, through which customers collect their purchases at the entrance of our stores at a pre-established time
- • Daily monitoring of the health of our employees, who, in the event of any symptoms, are asked to return to their homes for their prompt recovery and eventual reincorporation to work
- • Follow-up and support for positive cases
- • Employees belonging to at-risk groups were relieved of their responsibilities until further notice with no impact on their salaries
- • Enabling home office for corporate employees, as long as their duties allow it
Likewise, during March, a month of mandatory quarantine imposed by the Mexican government, we donated 73,288 food baskets to collaborators and recipients of the Federal government’s on-the-job training program for NEET young people (Jóvenes Construyendo el Futuro) in our stores for a total value of Ps.16,053,543.
Since May 22, we kicked off a fundraising campaign for the benefit of our volunteer packers, gathering resources for an amount of Ps.42,214,605, which, together with the donations from our customers and a contribution from Chedraui Foundation, has allowed us to provide financial assistance through weekly deposits in their e-wallets indefinitely.
Hiring
In line with our strategy to support the communities where we operate, our policy in Mexico is to hire members of the local community where our stores are located in order to provide better customer service and promote a good balance between work, social, and personal life for our employees by fostering family life. For senior positions such as administrative, we recruit from local universities.
The remaining employees are hired by one of our subsidiaries, both in Mexico or in the United States.
Training
At Chedraui, we know that our employees constitute one of the cornerstones of our operation; therefore, one of our most important projects is the Chedraui Corporate University, which is intended to provide online courses so that all our employees receive the training necessary to improve their performance and development.
The training is divided into theoretical and practical, each with its respective evaluation, which is carried out taking into account the values of honesty, commitment, respect, and efficiency.
We also have a Replacement Training Program, which allows us to prepare enough trained and available personnel to fill upper positions, in addition to having the necessary collaborators at all times to sustain retail expansion.
Safety, Health, and Hygiene
We foster a culture of prevention among our employees through the launch of health and safety campaigns and by providing them with personal protection equipment (PPE). Grupo Chedraui periodically undergoes evaluations in these areas, standing out for its full compliance with regulatory requirements and higher overall score compared to the industry average.
Each of our work centers has a Health and Safety Committee, which, in collaboration with the unions, promotes health and safety through special training courses for all employees while overseeing compliance with relevant standards.
Our strong commitment to continuously improve in this front is reflected in the thorough annual review of our health and safety policies and objectives.
Remuneration
One of our objectives is to guarantee the rights of our employees and executives in accordance with labor regulations, for this reason we grant a combination of fixed salary and performance bonuses for each business area in which they work.
On top of legal compensations, we provide an additional medical service and, for those employees who wish to opt for voluntary retirement, we offer a compensation plan prepared in accordance with the Mexican Labor Law (Ley Federal del Trabajo).
Chedraui te Escucha (Chedraui listens to you)
Chedraui has a suggestion and complaint box called "Chedraui te Escucha" (Chedraui Listens to You) that channels all the concerns of our employees, suppliers, and carriers. Through it, it is possible to report anonymously a behavior or situation that does infringes the Company's code of ethics and, through an independent body, the message is redirected to the Ethics Committee, who will investigate and, if necessary, take the appropriate measures.
Gender Diversity
As a leading company in our industry, we believe it is important to promote respect for diversity, gender equity, and human rights. For this reason, we have created the Diversity and Inclusion Committee, whose objective is to instill in our employees, executives, and other stakeholders a work culture that brings equal opportunities for all, ensuring that everyone is treated with dignity and respect.
Furthermore, we make sure that every employee is informed of and embraces our Diversity and Inclusion policy through special workshops at our Corporate University.
We do not discriminate against any customer or employee based on career, skin color, gender, religion, age, sexual orientation, abilities, and nationality, in line with the United Nations Global Compact.
Thanks to our charity checkout campaign, senior citizens who served as Volunteer Packers in all of our stores were able to maintain a decent income indefinitely since the outbreak of the COVID-19 pandemic.
Employees by Gender:
| Gender | Mexico | % | U.S. | % | Total | % |
|---|---|---|---|---|---|---|
| Male | 21,684 | 54.2% | 5,351 | 44.2% | 27,035 | 51.8% |
| Female | 18,346 | 45.8% | 6,768 | 55.8% | 25,114 | 48.2% |
| Total | 40,030 | 100.0% | 12,119 | 100.0% | 52,149 | 100.0% |
Unions
At year-end 2020, 40.5% of our employees were unionized.
Our employees in Mexico are affiliated with 26 separate unions while labor relations with each of these unions are governed by 350 collective bargaining agreements, which are negotiated annually and independently with each union.
In the United States, only our employees who used to work at Grupo Gigante (prior to its acquisition) are unionized.
| Unionized employees and not unionized | 2019 | 2020 |
|---|---|---|
| Retail Operations in Mexico: | ||
| Total unionized employees | 18,670 | 18,868 |
| Total non-unionized employees | 16,189 | 16,861 |
| Retail Operations in the U.S.: | ||
| Total unionized employees | 604 | 637 |
| Total non-unionized employees | 10,322 | 10,779 |
| Distribution Centers: | ||
| Total unionized employees | 740 | 1,455 |
| Total non-unionized employees | 1,935 | 1,169 |
| Administrative areas: | ||
| Total unionized employees | 189 | 180 |
| Total non-unionized employees | 2,245 | 2,200 |
| Total Employees | 50,894 | 52,149 |
Employee retention
We are well aware that to drive the Company’s growth and success we must maintain an informed and enthusiastic workforce. For this reason, we strive to keep our staff turnover low, especially considering that our sector is characterized by its high turnover rates. In this regard, we continue to carry out actions to foster a sense of loyalty and community in our employees, thus encouraging them to pursue a career at the Company.
At Grupo Chedraui, we strive to always be an outstanding model in Corporate Social Responsibility. For this reason, we have undertaken several commitments in this area, which are outlined in our Code of Ethics, including:
Our social commitment earned us the #5 position in Merco's 2020 Retail and Departmental Sector Reputation Ranking, a reputational assessment tool that is distinguished worldwide for being the first monitoring system to be audited, as its comprehensive preparation process is subject to an independent review by KPMG.
The Chedraui Foundation is the core component of our Social Responsibility model, through which we keep a close relationship with our communities and provide educational, medical, housing, and food support, as well as social assistance, sustainable cooperation, and natural disaster relief.
It is worth noting that Chedraui Foundation remained a member of the UN Global Compact, seeking to strengthen the Company's social responsibility and promote sustainable development in line with the 10 Principles and 17 Sustainable Development Goals.
EDUCATION
Our three Liceo de Artes y Oficios schools, academic institutions located in the cities of Xalapa, Veracruz and Villahermosa, were created to provide quality upper secondary education to young Mexicans from the most underprivileged socioeconomic strata.
We prepare our students to continue with their university studies, to find or get better jobs, and/or to establish their own business to improve their quality of life and that of their families. In addition, we grant scholarships to our alumni with the best grades, so they may continue studying, as well as to outstanding students at the University of Veracruz (Universidad Veracruzana) through the same institution’s non-profit organization. We also collaborate with the Fundación Pro Empleo Xalapa, a non-profit institution committed to helping develop micro- and small-sized enterprises in the State of Veracruz.
We also encourage our employees to continue their studies, offering alternatives and opportunities for them to study secondary and higher education, so that they can pursue better positions and earnings within our organization.
In the wake of COVID-19 pandemic, pursuant to government instructions and to protect our students and teachers, our centers transitioned from in-person and classroom settings to offer online learning in order to continue with the educational programs as best as possible.
For the above reasons, we are pleased to highlight that more than 4,000 students graduated from Liceo de Artes y Oficios schools in 2020. Consequently, 50,118 students have graduated since the creation of these institutions, 32 years ago.
HEALTH
At Chedraui, together with several health institutions, we support the assistance of people suffering from illnesses and ailments who lack financial means to access quality health services suited to their needs.
Among the supported institutions are:
- • AHTECA (Spanish acronym for “Help me brother, I have cancer”)
- • Children’s Hospital of Mexico “Federico Gómez”
- • Xalapa Regional Civil Hospital “Dr. Luis F. Nachón” through the Veracruz Public Assistance Trust (Patronato Pro Asistencia Pública de Veracruz)
- • Fundación Casa Nueva, which helps people with addictions
- • Instituto Down Xalapa, which provides specialized assistance to children suffering Down syndrome
- • Casa de la Amistad para Niños con Cáncer, a cancer treatment center for children
NUTRITION
Committing time and resources is an excellent way to support a community. For this reason, with the support of our employees, we implement a volunteer program in all our stores for the separation, selection and delivery of food that does not meet our quality standards for sale, but it is in perfect condition to be consumed.
The food is directly delivered to up to 82 organizations dedicated to support Mexican families with limited resources, including the Mexican Association of Food Banks (Asociación de Bancos de Alimentos de México, BAMX), Alimentos de México a Compartir (AMA), Fundación Emmanuel, whose mission is to assist people deprived of their freedom and their families, street children and people in extreme poverty.
Through the Chedraui Foundation, we make food donations from all our branches to people, families, and communities most affected by the health contingency, including elderly groups and people who are unemployed or who have recently lost their jobs or their main income source.
We also delivered 73,288 food baskets (valued at approximately Ps.16 million) to employees, scholarship recipients and volunteer packers, as well as 8,142 e-wallets (Ps.42 million in total) to volunteer packers who, due to the pandemic, had to be sent home. This support was provided to ensure that they do not neglect their nutrition in the face of these challenging times.
In addition, we strengthened and created alliances with foundations and institutions to lend a helping hand to a greater number of people affected by the contingency, thereby reaching 36,473 families.
SOCIAL ASSISTANCE
In line with our commitment to support the most vulnerable people, families, and communities, we provide assistance with the purpose of improving the quality of life of low-income people in collaboration with several institutions engaged in the promotion of universal human values, integral formation, as well as charity and volunteering, including Cáritas Mexicana, Cáritas de Xalapa and other Regional Caritas.
INVESTMENT FOR URBAN UPGRADING
As of our commitment to towards our communities, during 2020 we invested Ps.16,974,586 in several urban upgrading projects.
NATURAL DISASTER RELIEF
Natural disasters can cause material and human losses in our communities, which is why the Company strives to assist victims of such events by donating a variety of items or providing financial support for different endeavors, including food, medicine, personal care, and cleaning supplies, as well as the repair or reconstruction of housing, including furniture and household items.
CHARITY CHECKOUT CAMPAIGN
Thanks to the cooperation, goodwill, and trust placed by our customers in our charity checkout campaigns, in 2020, we collected Ps.42,214,605, which were distributed to 8,142 volunteer packers through e-wallets. This initiative was conceived as a means of supporting our volunteer packers, since COVID-19 contingency required them to stay at home for being one of the most vulnerable groups to this disease. It is worth noting that since May 2020, funds from these donations has been transferred weekly to the e-wallets of our packers.
Including all of Chedraui Foundation contributions to education, health, nutrition, housing, social assistance, and natural disaster relief, a total of Ps.356,284,821 was donated.
We seek to improve the shopping experience of our customers by providing and implementing the necessary resources for the preservation of the environment in order to build a lasting legacy for future generations.
In this regard, we strive on a daily basis to lower our carbon footprint, in an effort to care for and protect the environment, while ensuring the uninterrupted operation of our stores, distribution centers, and corporate offices to offer our customers products of the highest quality and variety at the best price.
Although profitability is the most common way to measure a company's success, this is overstated if it is not paired with strong social and environmental performance, which is why our Code of Ethics establishes the following:
Environmental Care:
We commit to fully comply with environmental
laws, adopting procedures to lower and eliminate toxic and hazardous materials
in limit air, soil, and water pollution, as well as to protect and reforest
green areas.
For this purpose, we created a Sustainability Committee, which holds regular meetings and is made up of the Company’s key executive officers, including our Head of Sustainability and Social Responsibility who acts as chairman.
Sustainable projects in communities
Well aware of the impacts that may arise from the opening of a new branch, the Company implements sustainable projects aimed at preserving the biodiversity in the communities where it plans to build a new retail store.
In this sense, prior to the construction of new stores, studies and surveys are conducted to evaluate the economic potential, the social benefit, and the impacts that this would cause, as well as those related to its potential day-by-day operation. This allows us to deploy all relevant preventive and/or mitigation measures to strengthen the environment’s original conditions at the chosen location.
These actions include:
Thanks to the seed dispersal carried out via drones in 2019, the reforested area in Veracruz this year has 1,100 new pine trees per hectare.
And during 2020, we monitored the development of the more than 100 hectares reforested with the assistance of drones in the states of Veracruz and Oaxaca in 2019.
Carbon Footprint
To minimize our carbon footprint, we efficiently use energy and water, along with extensive recycling of materials such as cardboard, paper, plastic, and other actions.
Likewise, we are pleased with our initiatives aimed at replacing traditional energy sources with cleaner, modern ones. For example, we use wind and solar energy, which supplies roughly 70% of our stores' energy requirements.
In 2020, we invested up to Ps.40 million to install energy-saving lighting in our stores.
Recycling
At Chedraui, we work on transforming our processes to improve our environmental practices. For example, our stores in Mexico and the United States implement a waste management model that allows us to properly separate waste for recycling.
Our plastic bags comply with the regulations and standards of the respective authorities in each of our stores. Furthermore, to lessen our impact on plastic consumption and ease our customers' shopping experience, our product offering includes eco-friendly shopping bags available at the fresh produce department and checkout areas. We also allow our customers to bring their own containers for the sale of bulk products (hot and cold deli counters) and we eliminated the use of straws from our in-store consumption stations.
Additionally, we market those products whose packaging has the least ecological impact, and we encourage the consumption of fresh, organic, and natural products for better nutrition.
