Windows on ethical shopping (Issue 09)

on  ethical  shopping

Shoppers feel they can no longer afford to act on ethical principles 77% of shoppers would buy more environmentally friendly products if they were cheaper Only 30% are changing their habits to support local shops

Welcome to another edition of ÔWindowsÕ - a series of online reports from shopper research specialists Shoppercentric. In each issue we research a hot topic of relevance to retailers and manufacturers and analyse the issues involved.

CONTENTS

For our latest Windows report we explore how the economy is impacting on shoppers’ propensity to shop ethically. We offer a perspective on what the future holds for the ethical agenda and we investigate what influence ethical labelling is having on shopper behaviour in this context.

Principles at a price

4

Labels and the public consciousness

7

Prudence: the new green?

9

The war against waste

11

B

ased on 1,000 interviews with those actively involved in household shopping, together with observations from previous research projects, we aim to unpick the tangle of ethical and economic issues that face UK shoppers in 2010.

We challenge whether environmental or ethical considerations are top of mind when shoppers make their selections and explore how these sensitivities have evolved over recent years.

This ezine is designed to give you some of the overall themes and insights from our study. If you would like further information, or to have access to the full report, please email: ethicalshopping@shoppercentric.com

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Welcome to another edition of ÔWindowsÕ - a series of online reports from shopper research specialists Shoppercentric. In each issue we research a hot topic of relevance to retailers and manufacturers and analyse the issues involved.

CONTENTS

For our latest Windows report we explore how the economy is impacting on shoppers’ propensity to shop ethically. We offer a perspective on what the future holds for the ethical agenda and we investigate what influence ethical labelling is having on shopper behaviour in this context.

Principles at a price

4

Labels and the public consciousness

7

Prudence: the new green?

9

The war against waste

11

B

ased on 1,000 interviews with those actively involved in household shopping, together with observations from previous research projects, we aim to unpick the tangle of ethical and economic issues that face UK shoppers in 2010.

We challenge whether environmental or ethical considerations are top of mind when shoppers make their selections and explore how these sensitivities have evolved over recent years.

This ezine is designed to give you some of the overall themes and insights from our study. If you would like further information, or to have access to the full report, please email: ethicalshopping@shoppercentric.com

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Principles

at a price

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ccording to the Co-operative Bank’s “Ten Years Of Ethical Consumerism” report, spending on ethically produced food and drink has increased almost threefold since the turn of the new millennium.

Shoppers, retailers and manufacturers seem to be sharing a new, collective conscience as the drive towards fairer, sustainable trading continues apace. Starbucks and Cadbury are just two of the companies who have moved selected lines exclusively to Fairtrade in 2009, while Ben & Jerry’s has recently committed to switching all of its ingredients to Fairtrade by 2013.

In the summer of 2010, in the wake of the new government’s emergency budget, our research found that seven in ten shoppers were claiming to be more aware of prices than they used to be.

Predictable then that 55% also admitted that they were more focused on price than on ethical issues when deciding which items to buy.

However there are clear signs that current economic pressures may be in danger of putting the brakes on this laudable trend for some. In 2009 Fairtrade sales in the UK grew by just 12% compared with 45% in the previous year. And many shoppers are expressing difficulty in justifying what they see as a price premium to satisfy their ethical principles.

One shopper effectively sums up the nub of this issue for her: “At the end of the day I’ve got five mouths to feed. I simply can’t afford to buy a free range chicken.”

And even for those who are willing to accept the higher price of socially and environmentally friendly goods, product quality – not ethics alone – needs to justify this premium. 65% of shoppers agreed that they don't want to pay more for environmentally or socially friendly products if the taste / quality isn't any better.

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However, whilst the wallet may be feeling the strain the will appears to remain, even if it has been forced to lie dormant in some cases. A striking 77% claimed that they would shop more ethically if it was not more expensive to do so.

Local Heroes?

One might expect that a heightened environmental conscience together with an acute focus on the domestic economy would result in more local sourcing of products. However our evidence suggests that whilst some are taking the lead, this trend has yet to gain real traction. Just 39% of shoppers say that they want to make sure that the money they do spend benefits British (local) businesses, and only 30% claim to support local shops more in the current climate.

There are a sizeable proportion of shoppers for whom environmental and ethical concerns appear to have become hard-wired into their shopping habits. 52% of those interviewed claimed that they were trying to “do their bit” by shopping ethically, a figure that has risen from 45% in 2008.

Categories in which environmentally friendly products are sought % Total sample (1,000)

In fact more shoppers than ever claim to be making a point of buying environmentally / socially friendly packaged groceries: 52% compared with 43% in 2008. And few categories are now escaping their ethical eye. Most notably 49% of shoppers are now claiming to follow these principles when they buy toiletries, 25% when they buy clothes (compared with 16% in 2008) and 21% when they buy shoes.

2007 Fresh foods

66

36

Household cleaning products

Clothing

2010

63

Pre-packed/ ambient

Futhermore one in three mums are adopting an ethical approach to their baby buying habits: 30% when buying nappies and 34% when buying other items. Greater choices are bound to have played some part in these increases, but only if the underlying desire to shop ethically also exists.

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2008

43

47

13

68

52

42

16

45

25

Source: Windows on ethical shopping Q “In which, if any of these categories, do you currently make a point of buying environmentally/socially friendly products?”

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Whilst these principles are shared by shoppers of all ages, it is the young who are particularly active in their search for ethical goods, seemingly despite the well documented pressures of student debt.

Further reflecting this commitment to the cause, 57% agreed that they would try to buy more of these types of goods over the next five years (compared with 42% of the shopping population at large).

Those under 25 are most likely to look out for items bearing Free Range (37%), Fairtrade (34%), and Organic (32%) labelling. 65% of this group are keen to do their bit by buying environmentally / socially friendly products and 79% would buy more if these sorts of products were more easily available.

Does this suggest a new generation emerging for whom principles are more of a priority when shopping?

A view from Eastern Europe

whereas the highly urban populations in markets such as the UK needed to be strongly prompted by media, the more strongly rural populations in markets such as Poland are more driven by their own experiences - most Poles can tell the difference in taste between industrially produced foods and home-grown vegetables and meat!

Eastern European markets are some way behind their Western counterparts when it comes to the distribution of ethical, or environmentally friendly foods. For example, in Poland, the only modern retailer offering organic products is Organic Farma Zdrowia. That said, the appetite amongst shoppers is growing.

Interestingly, just as organic foods led the ethical trend in Western markets, the same is true in Poland. Like the early days here, it is a desire for better food quality rather than a more altruistic concern over the environment which seems to be driving the interest. Differences in market contexts however dictate that the origin of consumer interest in ethical / environmentally friendly products varies considerably:

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Market contexts also dictate which elements of the ethical agenda succeed or fail.

Fairtrade, for example, is not a widely adopted concept in Poland. Again, distribution is sparse at best, but in contrast with organic foods consumer interest is also low. The harsh reality is that most Poles simply do not have an interest in Third World working conditions, having significant economic problems of their own.

Contribution from: Agnieszka Gornicka, Inquiry (www.inquiry.com.pl)

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Labels & the public

consciousness W

Six in ten shoppers now claim to have noticed fair trade labelling on clothes and household goods – compared with just four in ten in 2008. And 47% are now noticing organic labelling on household goods and clothing, compared with 28% two years ago.

hen selecting food and drinks, shoppers are most likely to notice fair trade, organic, free range and recycled labelling – reflecting very little change since 2008. As the earliest issues to gain traction with the shopping public, it seems that relevant messages have been successfully conveyed and a certain saturation point reached with the vast majority now aware of these labels.

In contrast, new issues appear to be gaining more prominence on the supermarket shelves in 2010. Labels denoting where and how products have been sourced are much more likely to be noticed by shoppers today. 62% of shoppers now claim that they notice locally sourced labelling on food & drink (compared with 52% in 2008), 43% notice sustainable sourcing labels (compared with 28% in 2008), and 32% notice renewable energy labels (compared with 19% in 2008). These changes reflect a mainstream ethical agenda that is progressing into deeper, more complex territory as we are invited to consider the impact of our shopping basket on the planet at large.

Ethical labels ever seen o n f ood / d rink products % Total sample ( 1,000)

2007

2008

Free Range

79

Organic

72

Fairtrade

70

Bio-degradable

48

Non-GM

48

Dolphin Friendly / MSC

44

Locally sourced

42

Environmentally Friendly

38 30

Farm Assured

More striking still is the shift we observe in other, non-food categories.

Sustainable Sources Renewable Energy Sources

None of these

7

82 76

72

60

53 40

50

47

42

62

52

54

41

46

39

43

28

14 5

79

83

19

Carbon Miles

86

80

62

Recycled

2010

87

32

19

26

13 4

4

Source: Windows on ethical shopping Q “Which of these factors have you ever seen listed on the labels of food or drink products you buy?”

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can afford to care, or is it simply that they better realise the importance of continuing to remind their customers that they are ethically minded even if their customers cannot afford to be just now?

Shoppers are clearly recognising the extended reach of ethical issues in affecting choices way beyond coffee and eggs.

Yet despite this rise in consciousness it appears that ethical labelling on packs and goods is having to work harder than ever to make itself heard in the retail environment, in the absence of strong POS support.

It should go without saying that what can’t be seen can’t be bought – so if an ethical positioning is part of the retailer or product offer, this needs to be communicated in-store.

As the stage on which we shop, the retail environment plays an important part in projecting messages which aim to influence or strike a chord. Significant then that value messages are completely overshadowing any reference to the ethical agenda in our grocery aisles today.

Ethical labels ever seen on household goods & clothing % Total sample ( 1,000)

2007

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34

Bio-degradable

32

Fairtrade

28

Environmentally Friendly

28

Organic

As part of our research for this project we visited a range of retailers and were surprised to note that Tesco, for one, did not have a single overt piece of environmental or ethical messaging in the whole store – within a sea of price & value POS. Contrast this with M&S who continue to make a virtue of their Plan A principles, communicating key strategies with impactful signage in store. Is the latter more confident that their shoppers

2008

Recycled

Sustainable Sources

Locally sourced

6

Carbon Miles

3

40

40

59

34

41

28 18

11 8

49

35

16

Renewable Energy Sources

2010

41

12 15 9

47 32 26 32 21

Source: Windows on ethical shopping Q “Which of these factors have you ever seen listed on the labels of food or drink products you buy?”

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Prudence:

the new green?

T

he impact of the tough economic situation on shopping is clearly hard to deny. In the wake of the recent emergency budget, 54% of shoppers told us that they expect to feel the adverse effect of changes: most notably the rise in VAT (of these, 85% identified this as one of the things that will have greatest impact on them) as well as implications for public sector jobs and pay.

Areas looking to reduce spending

% Those expecting a negative effect on household income as a result of the emergency budget (542)

51

Clothes / shoes (adults) Going out / eating out days out

49

Holidays

40 33

Household food / groceries

Of those expecting the emergency budget to affect them, 33% expect to reduce their household food and grocery budget going forward. However shoppers are adopting a range of strategies to make their money go further and they are not necessarily buying cheaper. More and more shoppers are trying to buy smarter – cutting back on the things they don’t really need and making the things they do purchase go further. In other words demonstrating good old-fashioned prudence.

Alcohol / cigarettes

22

Fuel

20

Home entertainment

19

Cars

9

Adult club / sport / social memberships

8 6

Other Clothes / shoes (kids) Toys

74% of the shoppers we interviewed agreed that they were trying to avoid being tempted to buy things they didn't need. Of those who felt the emergency budget would make things harder for their households, half expected to cut back on clothes & shoes as well as social activities (going out / eating out / days out); 22% claimed they would be buying less alcohol / fewer cigarettes and 20% expected to cut back on fuel.

Kids activities

4 2 1

Source: Windows on ethical shopping Q “In which areas are you most likely to reduce your spending in order to cope with the impact of the budget?

Please chose up to 3 items”

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Closely allied to this strategy, many shoppers are also committed to making the most of what they do buy. 66% claim to be more careful about avoiding waste than they used to be and 64% say they are making things go further.

And whilst the main thrust of these changes is clearly financial, shoppers are recognising the environmental benefits of reducing their consumption. Following the excesses of the boom years, 44% of shoppers believe that cutting back and being more careful about how much they spend has made them more environmentally friendly. Indeed even in the most practical terms, economic and ethical considerations become closely entwined as 29% of shoppers claim that they will use local shops more nowadays to avoid wasting petrol.

In the words of one prudent shopper: “To be honest cutting back on what we are spending and being less greedy makes us more environmentally friendly. You could say it’s a win-win.”

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The

war

against waste

S

o in these tough times the avoidance of waste seems to strike a chord particularly with prudent shoppers. And this doesn’t just play out in what they buy – but also in how it has been packaged. In this respect two clear themes emerge:

Incorporating Ethical habits into shopping behaviour % Total sample (1,000)

Incorporating Ethical habits into shopping behaviour % Total sample (1,000) Never

7HJRHNPUN [OH[ LUZ\YLZ [OH[ MYLZO WYVK\J[Z HYL UV[ ^HZ[LK I` NVPUN VMM! 58% of shoppers always or frequently look for packaging that will ensure that goods stay fresher for longer 7HJRHNPUN [OH[ KVLZ UV[ LUK \W PU SHUKMPSS! Around half of shoppers will always / frequently choose products that have the least amount of packaging or that have packaging that is easy to recycle Indeed recycling has clearly become part of the national psyche, whether through personal principles or outside pressures (e.g.

M&S charging for bags). In our research

VM ZOVWWLYZ JSHPT [OH[ [OL` HS^H`Z VY MYLX\LU[S` [HRL [OLPY V^U IHNZ ZOVWWPUN This striking figure is reflected in The Waste Resources Action Programme’s recent statement that usage of carrier bags in the UK has reduced by an impressive 43% in 4 years.

(Source Guardian.co.uk 25 August 2010).

Frequently

Occasionally

I choose certain products in packaging that will keep them fresh for longer

9

I choose products in packaging that makes them easier to store

13

40

I try to choose food products that have the least amount of packaging

13

36

I deliberately choose products with packaging that's easy to recycle

16

33

Always

45

37

13

38

39

35

9

12

12

Source: Windows on ethical shopping Q “For each statement, please indicate how often you try to incorporate these views when doing your own food shopping.”

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The vast majority of shoppers are now recycling their household waste: most commonly newspapers (90%), glass (87%), plastic bottles (87%), cardboard packaging (86%), other paper (76%) and other plastic (70%). Even at the bottom of the scale, 41% are now recycling food waste – and just 3% of shoppers claim to be doing no recycling of this kind at all.

And it is not just the shoppers who are doing their bit. A wealth of retailer initiatives reflect our growing commitment to avoiding waste: from the use of anaerobic digestion to generate energy from food waste, to Tesco’s “From Somewhere to F&F” fashion collection made from obsolete jersey stock, damaged end of rolls and textile waste. Indeed all the major grocery retailers are committing to a drastic reduction in landfill from operational and constructional waste over the short term.

As the recession has shown shoppers - we can’t have it all.

Increasingly this sentiment will have an impact on our ethics, not just our finances.

In short, it is clear that the days of excess are behind us. Waste is expensive and it is irresponsible.

Its avoidance is a trend that seems set to grow.

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In summary then, whilst ethical spending may have flattened or even gone into reverse in some areas, we would strongly counsel against businesses reading these ‘trends’ as a suggestion that there is a diminishing desire for ethical products and practices among shoppers. Instead, we would interpret the changes in behaviour as reflecting a change in what shoppers are looking for. Ethical choices aren’t about products or retailers using ethical labels as some value-added variable that justifies a higher price point. Ethical choices are increasingly about fair pricing and ethical production and practices that extend beyond a label.

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Our series of Windows reports are a small part of the research service we provide to clients.

If you would like to know more about how we can help your business better understand shoppers’ attitudes, needs and behaviours please contact us.

CONTACT Iona Carter: iona.carter@shoppercentric.com mobile: + 44 7775 823 334 ethicalshopping@shoppercentric.com or visit our web site at: www.shoppercentric.com

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