Customer satisfaction and profits drive supermarket plastic bag ban, experts say

Wednesday, 30 May 2018

Banning plastic bags is more about driving profits than saving the planet, a marketing expert says.

University of Auckland head of marketing Bodo Lang said most companies wanted to be perceived as a 'good corporate citizen' because it helped attract, and retain, customers and workers.

However, Countdown spokeswoman Kiri Hannifin said Lang's comments were 'unfair'.

'We are not out to make a cent on this. We are just trying to do the right thing here.'

A research paper from 2007 estimated Kiwis use about 1.29 billion single-use plastic bags per year.

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'Of course it's about being a good corporate citizen, because, as a big business, we have an absolute obligation to do the right thing,' Hannifin said.

'But it's unfair to say we are doing it to increase sales across the business.'

'Phasing out single use plastic bags wasn't in any way a move to make money. There is nothing cynical in this,' she said.

Any profits made from 'emergency' bags, which were sold for 15 cents, were donated back to environment charities, Hannifin said.

Meanwhile, Steve Bayliss, general manager of marketing at Foodstuffs, which is Countdown's biggest rival, said the move away from single-use plastic bags was 'absolutely not' about the company's bottom line.

'Our customers are at the heart of every decision we make for New World, Pak 'n Save and Four Square. Without them we are nothing.

'We're flummoxed as to how any expert has failed to take into account the overwhelming sentiment of the New Zealand public for change with regard to plastic bags. That's what we're responding to.'

Marketing expert Bodo Lang says part of the reason companies are ditching single-use plastic bags is because they want to be seen as 'good corporate citizens'.

Lang said there was a 'real benefit to being a likeable brand and being perceived as doing the right things'.

'If customers are not on board, very very few companies would follow through.'

Companies would often do market research and crunch the numbers before making a decision, like banning plastic bags, Lang said.

Victoria University of Wellington head of marketing Val Hooper said customer satisfaction was important to companies.

Many companies wanted to genuinely do 'good things' and save the planet, but the priority was to make a profit for their shareholders, Hooper said.

'And anything that will jeopardise that, they attack and address.'

An attempt to ban plastic bags a few years ago by some companies failed, Hooper said.

'It just never took and in two ticks the plastic bags were back. However, now the time is right.'

The first company 'off the block' would reap the most benefits, she said.

However, the initial decision to ban plastic was consumer-driven, as people felt 'so strongly about this sort of pollution, she said.

Retail NZ spokesman Greg Harford refuted the marketing experts' opinions.

Countdown has gone plastic bag-free in 10 stores around the country, with the remaining 172 stores to follow before the end of the year.

'I really don't think that's the case at all. Retailers are generally concerned about sustainability.'

Retailers listened to customers' needs, he said.

'For a very long time, there was a wide customer expectation that retailers would provide a bag to take their shopping home in.

'That customer sentiment has changed markedly over the last couple of years, and that change in demand has encouraged various retailers to announce the end of plastic bags.'

In 2007, Victoria University research estimated total bag usage to be 1.29 billion bags a year, or five a week for every person in New Zealand.