Saturday, March 15, 2008

UK 'Banish The (Plastic) Bags' Campaign Update: Morrison's Latest to Make Announcement; Tesco Holds Firm


As part of our ongoing coverage of the United Kingdom's "Banish The (Plastic) Bag" campaign, which was launched by the London Daily Mail newspaper on February 27, we're keeping our readers updated on what moves, if any, that nation's top grocery retailers make in response to the campaign, the goal of which is to get retailers to dramatically decrease (or eliminate completely) the amount of free single-use plastic carrier or grocery bags they use to package customer purchases.

The anti-plastic bag movement is gaining ground in the U.S., although the nation's grocery retailers aren't at the center of it like in the UK--yet. Rather, in the U.S., the "ban the plastic bag" movement's focus is on legislation at the state and municipal levels.

For example, the states of California, New York and New Jersey have passed laws that require supermarkets to place plastic grocery bag recycling bins in all of their stores over a certain size. The food retailers also must make sure the bags are picked up weekly by a recycling service--and pay the costs. The legislation in these three states also requires the grocery retailers to sell reusable bags in their stores, something most of them were already doing.

The bigger action in terms of plastic bag bans in the U.S. though is at the city or municipality level. San Francisco was the first U.S. city to ban the use of plastic bags completely in 2007 in supermarkets in the city over 10,000 square feet in size. The law has been in affect in San Francisco since late last year. Nearby Oakland has passed a similar law. However, the plastic bag industry has challenged the legislation in court. As a result, the law's implementation has been set aside until there is a court decision on the lawsuit.

There currently are about 40 -to- 50 U.S. cities--ranging from tiny Willits in the far north of California, to Chicago in the Midwest and Santa Monica in Southern California, to Maryland in the east--that are considering legislation at one stage or the other that would ban the use of plastic carrier bags in supermarkets.

Additionally, Whole Foods Market, Inc. is the first major food and grocery retailer in the U.S. to announce it will eliminate the use of free plastic carrier bags in all of its 270 stores in the U.S., Canada and the UK (just one store in London thus far). The self-imposed plastic bag ban will become affective on Earth Day 2008, which is only a little over a month away on April 22. A number of other natural foods retailers, and perhaps a few upscale supermarket chains, are expected to follow Whole Foods' lead in self-banning plastic grocery bags in their stores.

Back in the United Kingdom

As we reported in our initial piece on the UK "banish The Bags" campaign last week, Tesco plc., parent company of Fresh & Easy Neighborhood Market USA, announced shortly after the Daily Mail launched the campaign--which has grown to include tens of thousands of consumers, politicians, city officials and others in the UK--that it would not either charge a per-bag fee or eliminate the plastic carrier bags from its stores.

Popular UK grocery and soft/hard goods retailer Marks & Spencer (M&S) was the first major retailer in the nation to get on board the "Banish The Bags" campaign. Just a couple days after the campaign began, M&S announced the retailer would begin a test in which it will charge the equivalent of about 10-cents U.S. per plastic carrier bag if a shopper chooses to have his or her purchases packaged in one, rather than in a free paper bag or a reusable shopping tote brought from home or purchased at M&S.

Other retailers followed. They include: department store chain Debenhams (320 stores in the UK), which will begin a trail program in which it will charge 10-cents U.S. per-bag; popular general merchandise retailer Woolworths (820 UK stores), which says it will institute a per-plastic carrier bag charge in some of its stores to start, then likely roll the scheme out to all its stores soon after; B&Q, a general merchandise retailer which has already started its per-bag charge trial and says thus far it's seeing about an 88% decrease in the number of plastic carrier bags the retailer is using in its stores; charity shop retailer Oxfam, which says it will soon eliminate plastic bags completely; and non-profit specialty retailer Help the Aged, which also says it is eliminating the use of plastic bags in its UK stores.

In terms of the UK's major grocery chains, Mark's & Spencer is thus far the only one to have instituted a per-plastic carrier bag charge trial, with the goal of instituting the scheme in all its stores if there isn't extensive consumer complaints.

However, a number of UK supermarket chains have followed M&S's lead, and have made some changes via announcements in just the less than three weeks since the "Banish The Bags" campaign was launched.

Below are the UK's top supermarket chains (in order of market share), and what if any announcements they've made since the February 27 kick-off of the anti-free plastic carrier bag campaign:

Tesco: Shortly after the campaign launch, a Tesco spokesperson said the company's, and CEO Sir Terry Leahy's, policy if that the nation's number one chain with about a 33% market share, has no plans to either charge a per-bag plastic carrier bag fee or to eliminate the use of the bags in its stores. Tesco says it's a matter of consumer choice if a shopper wants their groceries packed in a single-use plastic grocery bag.

Asda: Wal-Mart-owned Asda made an announcement last week in response to the "Banish The Bags" campaign that it will remove all single-use plastic grocery bags from the end of its store checkstands, where they are available free for shoppers to take if they desire, in addition to being used to pack customer purchases.

Asda also said it is instructing its store clerks to only use plastic carrier bags if a customer specifically asked for them. Further, the clerks are now to ask each shopper if they brought any reusable shopping totes with them to the store to be used by the clerk to pack his or her order. The clerks also are to let each shopper know the Asda store sells reusable "bags for life" at an inexpensive price. In terms of charging a per-bag fee like M&S, Asda says it hasn't ruled it out, but wants to see what percentage of a decrease in single-use plastic carrier bag use it can get first from the above steps.

All of the major UK supermarket chains--Tesco, Asda, Sainsbury's, Morrisons, the Co-op, Waitrose and Somerfield--have pledged to reduce the volume of single-use plastic bags they use by 25% by the end of 2008, compared to 2007 quantities.

Sainsbury's: The UK's third-largest grocery chain (nearly tied with ASDA at number two) announced last week that beginning on March 24 it will instruct all store workers to ask each shopper if they have brought a reusable bag from home for their grocery purchases. If the customer doesn't have on, the store clerk is supposed to let the shopper know the grocer offers them for sale at a variety of prices in the store.

Sainsbury's also announced it will step-up its free "bags for life" giveaway program. The retailer says it gave away about 15 million free reusable bags last year. The grocer says it plans to give away even more than that this year--and on a more regular basis in its stores. Last year, Sainsbury's handed out a whopping 1.78 billion free plastic carrier bags. That's about the equivalent of 68 plastic grocery bags for every British household in a year's period of time.

Morrisons: Morrisons is the latest member of the UK's "big four"--Tesco, Asda, Sainsbury's and Morrisons--supermarket chains to make an announcement on its plastic carrier bag policy in response to the "Banish The Bags" campaign.

Yesterday, the grocery chain's CEO Marc Bolland told reporters at a press conference that the grocer has no plans to start charging customers for the single-use plastic bags. However, Bolland announced a campaign set to begin in May in which the supermarket chain will give away 10 million reusable shopping bags in its stores.

The CEO of the UK's fourth-largest grocery chain also told the press, the retailer's use of plastic carrier bags has thus far decrease by about 18% compared to the same time last year. He said the May reusable bags in-store campaign is designed to help the retailer get to its 25% reduction by the end of the year commitment.

Somerfield: The Somerfield chain gives shoppers free, single-use plastic carrier bags like all the other grocery chains mentioned do. As of today, the supermarket chain has made no announcement of any changes in its free plastic grocery bag policy.

Waitrose: The UK's leading upscale and trendy grocery chain surprisingly hasn't made any changes or an announcement regarding its plastic carrier bag policy. Waitrose, like the others, gives them free to its customers. Most UK industry observers thought Waitrose, the British foodies' favorite food store, would have made a policy change and announcement by now, especially in light of Marks & Spencer's leadership position. But, there's been nothing from Waitrose to date.

The Co-op: The Co-op, a cooperative supermarket chain, is arguably the UK's greenest grocery chain. However, it still gives free, single-use plastic carrier bags to its customers, but only if they request them. Co-op shoppers are big users of reusable shopping bags--and the grocer pushes their use in a major way.

The Co-op has made a change (and announcement) however regarding its plastic bag use policy. The retailer has launched a test of a new fast-composting bag made out of plant material in a number of its stores. The Co-op says its plans--if the bags work as expected--is to phase-out completely the use of regular, single-use plastic carrier bags in all of its UK grocery stores and other retail venues.

Based on our analysis above, Tesco is the only one of the UK's "big four" supermarket chains, which account for about 80% -to-85% of all groceries sold in the country, to not have made some changes, even minor ones like some of the others, thus far post the "Banish The Bags" campaign. Additionally, of the UK's top-seven chains, only Tesco, Somerfield and Waitrose have yet to announce even minor changes to their respective single-use plastic carrier bag policies.

Political support in the UK for 'banishing the plastic bags'

The campaign to dramatically reduce the use of free plastic carrier bags, or do away with them all together, recently got a major boost when Prime Minister Gordon Brown said he supports the goals of the campaign.

Brown recently told the UK retail industry--with an emphasis on grocery chains--they have one year to seriously reduce the volume of the free bags they use in their stores. If no, he said he will push-trough legislation that will either impose a per-bag fee at retail or even eliminate the bags completely, which is something China recently did--and is happening throughout the world.

Yesterday, another major UK political player, chancellor Alistair Darling threatened to impose a per-bag charge on single-use carrier bags if retailers don't take "aggressive action" to discourage consumers from using them. Darling told retailers the government will exercise its powers early next year to impose a per-bag charge "if there is not sufficient progress (by retailers) on a voluntary basic by the end of this year."

It appears PM Brown and chancellor Darling are on the same page regarding legislation early next year if a dramatic reduction in single-use plastic carrier bags doesn't happen by the end of this year.

Our UK sources tell us they expect Waitrose to soon join Asda, Sainsbury's, Morrison's, the Co-and the Co-op in making changes (and public announcements) to their respective plastic grocery bag policies. Since Tesco is head-over-heels the major player in UK grocery retailing with a 33% market share though, it's going to have to be the leader and achieve a major reduction in single-use plastic carrier bag use most observers believe in order for the industry to stave-off legislation by Brown, Darling and others early next year.

Tesco says it is reducing its use of the plastic grocery bags with a combination of internal policies which include: selling reusable bags cheaply in all its stores, encouraging customers to use reusable or paper rather than plastic, and other measures. The retailer says it can meet its 25% reduction pledge by the end of this year.

Others aren't sure Tesco can meet the 25% reduction goal. They're also unsure if the other members of the "big four" grocery chains will hit 25% as well. Further, they say the 25% isn't a magic number anyway. Rather, its just an initial goal the grocers' respectively agreed on last year.

What's key these observers tell us, is that the retail industry as a whole must reduce the overall use of plastic carrier bags by at least 50% by the beginning of next year if they want to prevent a law which will either put a charge on the bags or eliminate them completely. We think the law will likely be the former rather than the latter.

Additionally, we believe a per-bag fee of 10-cents U.S. will likely be the amount if such legislation is passed--which it likes like is becoming more probable. Based on that analysis, it looks like Marks & Spencer is ahead of the curve, and would benefit if such a law is passed next year since its the first mover on the issue.

Majority of UK consumers support banishing the plastic bags

Numerous polls show at least 80% of UK consumers approve of a per-bag single-use plastic carrier bag fee of about 10-cents U.S. each. Further, the same polls show at least 70% of UK consumers (who also are voters) favor an outright ban on the use of the thin, single-use carrier bags.

With public opinion so much with them on the issue, we don't think UK pols will hesitate to pass a per-bag fee law scheme next year if there isn't a serious, documented reduction in the use of plastic carrier bags by all UK retailers--not just grocers--in the next 10 months or so.

1 comment:

Matt said...

Great summary of all the UK supermarket's plastic carrier bag status, well done.

It's a shame that the Aussie's don't seem to be taking the same action, despite threats of a complete ban...