BrainTrust Query: Will new bag laws discourage big basket sizes?
Levy, president, Captus Business Consulting
We love laws
here in Canada. The City of Toronto just introduced a new one banning the
use of plastic grocery bags. Well, not actually banning them but mandating
that any company that uses them in a retail capacity must charge a minimum
of five cents per bag to the customer. This is meant to deter their use
as they have a half-life of a million years, or something like that. I
am for any initiative that helps protect the environment. But, when it
comes to being environmentally friendly, we in retail industry have challenges
and opportunities to consider.
such as Loblaws have now started charging for bags company-wide and their
value brand, No Frills, has actually been charging for bags for decades.
I presume other chains will soon jump on this as a way of conveying an
environmental commitment. Good stuff for Mother Earth!
A recent visit to
my local Loblaws got me thinking and I concluded that
retailers will need a new strategy to cope with this trend. I love a
good deal and I found myself without my usual ball of plastic bags. (I’m
not as classy as my wife with her neatly folded canvas reusable bags.)
Realizing that I had no bags actually convinced me to end my store visit
early, hence preventing me from buying more products. As an exercise, I
picked the longest line to see if I was the only one that forgot bags or
had this thought process. Out of six customers in front of me, five forgot
bags and only one bought a plastic bag (for five cents).
scary part: three of the remaining customers reduced their orders considerably.
And even more questionable was that the cashier failed to recommend their
store-branded reusable bag for 99 cents.
I’m a big
believer in building the basket to build margin. The new bag policies seem
to counter this. Can we save the environment and still make money?
a recent study funded by the Environment and Plastics
Industry Council here found
that these reusable bags are hot beds of bacterial growth. Not only do
I have to remember to bring bags now, but I also have to maintain and wash
them as well? None of the POP material surrounding these reusable bags
indicates anything about care and use. It’s just one big plastic hassle.
Groceries are dependent on big orders to become profitable. Will the
trend of charging for bags act as an obstacle in building bigger baskets?
What strategies can grocers implement to maintain impulse buying in the