BrainTrust Query: Will new bag laws discourage big basket sizes?

Discussion
May 22, 2009

By Doron
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.

Some chains
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).

Here’s the
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?

Further,
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.

Discussion Questions:
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
store?

Please practice The RetailWire Golden Rule when submitting your comments.

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17 Comments on "BrainTrust Query: Will new bag laws discourage big basket sizes?"


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Kevin Graff
Guest
11 years 11 months ago

So, let’s see…because I have to pay for a bag, I’m going to buy less today, which means I’ll have to come back tomorrow, and then again the day after. C’mon! Will some customers be annoyed at the charge? Yes. Will it make them spend less? No way. You can’t even get a bag at Costco and it seems to me the carts there are overflowing.

If it takes a small charge to force both consumers and retailers to be better stewards of the environment then so be it. We used to drive around cars with nasty emission levels and use leaded gas. Even though we’ve been ‘forced’ to pay more for more fuel efficient technology and gas, we still drive our cars. Customers will still shop, and buy just as much as before. Bag, or no bag.

Bob Phibbs
Guest
11 years 11 months ago

As always, implementation is the key. Costco in the states uses old boxes to bag. I hope other RW panelists can cite examples of companies doing this right. It would seem to me to credit people who have their own bags rather than charge for those who don’t as your observation showed people putting items back. Never something to welcome at the register.

Nikki Baird
Guest
Nikki Baird
11 years 11 months ago
I really think this is a temporary thing as people adjust. We just made the switch to canvas bags, which we store in our car. For the first month, it was a pain. We would forget to put them back in the car when we brought purchases inside, we would forget to take them in the store with us when we shopped (yes, I made my husband go all the way out to the parking lot to get them). But now we’re in the rhythm, and before I go into a store I remember to take a moment to think: will I need a bag? and grab one out of the back. But is a nickel really going to change your mind about your purchases long term? Really? Or is it just that jolt that makes you vow to remember next time? Remember, it takes 31 times to make it a habit! My bigger complaint is that cash wraps are not designed to handle customers bringing their own bags, and there is no standard for… Read more »
Camille P. Schuster, Ph.D.
Guest
11 years 11 months ago

Generally, consumers make a change when they have to, or when they decide that want to. If the previous statement about canvas bags being hotbeds of bacteria has any validity at all, it will be picked up by someone and become an issue then stores will be accused of forcing consumers to either pay or be exposed to bacteria and someone who becomes ill will sue the retailer for being liable for forcing consumers to be exposed to bacteria. Leave the choice to consumers.

Bernice Hurst
Guest
11 years 11 months ago
The Calgary paper’s story really annoyed me, especially after I read the Vancouver Sun version with its totally sensible, simple and self-apparent solutions. Don’t use the same bags for gym kit and food, don’t use the same bags for meat or poultry and produce (i.e. like the instructions for kitchen utensils). (Soiled, reusable shopping bags pose health risk: Study). As for people putting things back, my own observations are similar to Nikki’s. At first, people are flummoxed and forget their bags but soon learn the lesson. Some British supermarkets have them under the counter and offer them but do give them away on request. Most people seem to bring their bags now, though. I have no idea how they pack them (we do it ourselves) and/or clean them. It’s also interesting to see the range of mix ‘n match with shoppers in one store using branded bags from a competitor. On one occasion (when my wrist was broken and I couldn’t carry much), I brought plastic bags from a previous trip and was very embarrassed… Read more »
Al McClain
Guest
Al McClain
11 years 11 months ago

Customers who can’t or won’t pay a nickel per bag are probably not top-spending shoppers anyway. And, where are they going to go when all retailers are charging this fee? As far as the bags being contaminated, under that logic, I guess we should just start throwing everything away, such as clothes, towels, and shoes, once they have been used once. That should stimulate the economy.

Anne Bieler
Guest
Anne Bieler
11 years 11 months ago
Revisiting this a year from now, wonder what we will see? Yes, the idea of eliminating lightweight plastic bags is a big one as we will have to adapt our shopping habits. Club and discount banners offer all the cartons you can carry–saving them money. Grocers are selling plastic totes that carry a lot of purchases, don’t fall over in the trunk, and reduce trips to unload–and are still easy to handle. They nest well and help keep the car storage areas organized. New shopping carts are designed to work with them, moving us quicker through the store. There are new nylon bags that fit into a tiny carry case that clips onto a purse or backpack–more attractive and convenient, easy to keep with you. In time it will just be the way we shop. Biggest hassle mentioned is slowing check out as pack-off not designed for the array of customer bags/totes. The self service checkouts are also an issue, but progress being made here as better solutions become available. At the end of the… Read more »
Warren Thayer
Guest
11 years 11 months ago

The Co-op store where I shop has a sign outside: “Did you forget your bags?” I’ve retraced my steps to the car I don’t know how many times because of that sign. They give you a nickel off for every one of your own bags you use, but that’s not the real incentive. People just want to make a contribution to sustainability. As for buying less because I don’t want to pay for a nickel bag? (Gee, “nickel bag” has shades of the 60s, doesn’t it?) Come on! Reminds me of the lady who once complained to a store that the produce misters were adding weight to the squash, and she wanted to dry them off before they were weighed and paid for. (And I’m not making that up.)

Marge Laney
Guest
11 years 11 months ago

Will the end of plastic bags or charging for them end our need or desire for stuff? I don’t think so. Whole Foods eliminated plastic bags last year and moved to paper. Their comps are down, but I don’t think the elimination of the plastic bag is the problem.

I guess paper isn’t the answer either as they’re real tree killers. I don’t like the idea of schlepping my own bags into the store, but I guess it’s just one more inconvenience I’m probably going to have to get used to.

By the way, who benefits from the five cent “charge” in Canada? I know this is going to come off a little jaundiced, but it sounds like just another way to fill the city coffers in the name of saving the planet. If they are really concerned about the environmental impact, they should just ban them.

Marc Gordon
Guest
Marc Gordon
11 years 11 months ago

So let me understand this: you and a bunch of other customers standing in line all reduced your initial shopping lists in order to save the 5 or 10 cents needed to buy some additional plastic bags? I wonder how much money you would all spend in gas going home then coming back another time to buy the stuff you wanted to buy the first time. Not to mention the environmental impact.

Peter Milic
Guest
Peter Milic
11 years 11 months ago

It is often the case with an initiative requiring (rather than encouraging) consumers to change entrenched behavior there will be initial resistance and over statement of response. In this instance, I have every reason to believe that the impact will be inconsequential and short lived. Loblaw Companies Ltd. chose to comply with the new by-law well ahead of the required implementation date.

The more important issue here is whether this decision to act in advance of its competition will be perceived by customers as demonstrating commitment to the environment or be seen as a short term cash grab.

During the six month period that Loblaws is the only major grocery chain charging 5 cents per bag, will its customers opt to shop elsewhere? Once all retailers comply, there will be no competitive advantage or disadvantage. Finally, if the basket size does shrink, does that mean we will eat less or spend more money on gas to grocery shop more often? Definitely not.

Rick Moss
Guest
11 years 11 months ago

It may seem ridiculous that a nickel would alter purchasing habits, but I agree with Doron that retailers should look at these kinds of details more carefully, especially when they involve the critical checkout process. Another example: my wife bought us a few nice canvas bags to use so we could feel good about ourselves again. I took them to my favorite quick-in-and-out supermarket (quick because I can use the self-checkouts). Despite the fact that they had their own reusable bags for sale hanging above the self-checkouts, they aren’t allowed. The weight of the canvas screws up the scales that are calibrated for plastic. Details, details.

David Livingston
Guest
11 years 11 months ago

Let’s see, Aldi has been charging for bags for years now and they are not only the lowest-priced grocer in the USA but also one of the fasted growing. Aldi has to be getting a big giggle out this. I don’t think having to bring your own bags, or buy your bags, has hurt Aldi one bit.

On the other hand, telling a grocer they have to charge for bags sounds stupid to me. If a grocer wants to give away a free product of any kind, it’s no business of the government to tell the grocer what he can and cannot give away. The price of bags is built into the pricing structure.

Li McClelland
Guest
Li McClelland
11 years 11 months ago

I’m kind of surprised to read that so many of the commenters on this site who are usually very vocal about customer service and the customer’s retail experience aren’t at least a little more curious or sympathetic about possible negative shopper reaction to this new plastic bag law. The good citizens of Cook County are currently up in arms over a small sales tax hike that on paper probably looked benign, but instead has become the tipping point for rage. Customers are cleverly finding other ways and places to shop which now also has retailers howling about their reduced receipts. Merchants in adjacent counties of the metro area where sales taxes are lower are smiling, however.

I’ll also add that some of the most environmentally conscious people I know are also quite libertarian. They despise the use of fees and taxes in order to “make” people do stuff which is ostensibly the purpose of this plastic bag law.

Rick Boretsky
Guest
Rick Boretsky
11 years 11 months ago

This law will accomplish little. Just more money for the grocery store, as far as I can see. Hopefully this money is at least going towards some worthy environmental cause!

William Passodelis
Guest
11 years 11 months ago

I think it is GREAT. We should work to stop the onslaught of the plastic bag. We have had enough of them over the last 15-20 years–aliens 50,000 years from now will find them excavating our garbage dumps. Some people with money will buy the bags every visit and not think twice. More normal people will make the mistake once or maybe twice and then switch to reusable canvas. Some people are ahead of us and are using reusable canvas with every visit!

Mark Lilien
Guest
11 years 11 months ago

Plastic bags dent supermarket profits. Charging 5 cents for checkout bags will raise trash bag sales. All in all, a win for the environment and reduced overhead for grocers.

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