This Week in Retail – Grocers and Governments

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This week, we look at the impact of recent legislation on retail and consumer behaviour and ask whether retailers can make changes on their own, or whether they need laws to enforce change.

As we quieten down for the summer lull, a few stories to tide us over in the meantime.

First is the ever-evolving story of reducing waste and environmental impact in retail. We have seen plastic bag usage collapse since the ban came in, dropping over 90%. The average customer used to buy 140 bags a year before the ban came in, down to 10 now. Whilst welcome, this does pose two questions to the industry; firstly, are we clear on what a truly better alternative looks like? Our Tweet this week from Lord Price does hint at the complexity retailers have to grapple with when it comes to creating environmentally sound packaging. Secondly, and perhaps more significantly, retail has always prided itself on the market dynamic that sits underneath it. Listening and responding to customer feedback has been a mantra, giving retail a sense of pride as an industry of change, and yet it took legislation to make this one (which has been broadly both positive and painless by customers). However major changes in recent years – plastic bag levy, the sugar tax, changes to tobacco selling – have all been legislative. Can retailers take big and unilateral stances, or will it need statutes to do this in other areas in the future?

Perhaps we’ll see this tested in another environment, with the news that UK shops use 1% of UK electricity for refrigeration. Considering the size and scale of supermarket fridges, if anything I’m surprised the number wasn’t larger – however this is clearly an emerging conversation within the broader environmental one. Improving the efficiency of these has been, and will forever be, on retailers’ to-do lists. Apart from the financial efficiency of having doors on fridges, there’s another benefit long known to retailers – customers don’t like the cold. I remember talking to a Frozen Food Director who had reams of customer feedback saying the biggest blocker to customers shopping the department wasn’t the layout, or the range, or the price – it’s just too cold down that aisle to spend much browsing time. However, doors are a big call and are historically seen as a sales inhibitor, will a grocer make the call on this on their own, or will it need the legislators to step in?

 

Author


Nick Hoenig

Managing Consultant, Operations Transformation

Retail, with a focus on Store Transformation and Store Evolution, Proposition Development, and Landing Change in Retail

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