business news in context, analysis with attitude

Yesterday, MNB took note of a New York Times report that Australian supermarket chain Coles yesterday “reversed its decision to ban single-use plastic bags after its customers complained, a move that bucked a global trend to reduce plastic bag waste and prompted a social media backlash against the company.”

I commented:

I know that whenever this subject comes up, I get email from folks arguing that the whole idea that plastic bags are bad for the environment is a canard.

I don’t understand this … in the sense that the more that any of us can do to reduce the use of any and all disposables is a good thing. If you have the opportunity to do anything to reduce the impact on the planet, why wouldn’t you do it?

One MNB reader responded:

I don’t think plastic bag bans are about reducing the environmental impact on our planet….in the state of California at least, it’s about crony capitalism under the guise of reducing waste. Food retailers in California worked with environmental concerns to pass legislation in the state that bans “single use” plastic bags in food stores. The catch is that these retailers now charge $.10 per “reusable” plastic bag and they keep the revenue…it does not go to the state, or to any environmental concern. What a bunch of hooey. Food retailers were able to turn one of their largest supply expenses into a revenue stream at huge profit. MAYBE these thicker PLASTIC bags cost a nickel….maybe and they sell them for a dime…really? All this overlooks the facts…

According to Plastic Bags And The Environment:
Plastic bags require 70% less energy to manufacture and consume 96% less water than what is used to make paper bags.

Once disposed, reusable bags take up 9.3% more spade than plastic bags in landfills.

American made plastic bags are produced from byproducts of natural gas, not oil.

Plastic bags account for just half of 1% of U.S. waste. And when banned are replaced with thicker plastic bags.

Plastic retail bags comprise less than 2% of overall litter.

Finally…one year after the state wide ban in California, an Ocean Conservancy survey showed a negligible 0.2% decrease in plastic bag litter as a percentage of overall litter.
At the end of the day, single use grocery bags are rarely single use…cat boxes, dog waste…plus one can buy these bags on AMAZON for less that three cents each for a pack of 500!!!! Yeah!

Even if all that is true - and I’m not sure I accept that it is, since the website cited is owned and operated by Novolex, which manufactures plastic bags - I’ll stick with my observation that it simply makes sense to reduce any and all waste whenever and wherever possible.

I see no downside.

Besides, I agree with the Upton Sinclair line: “It's difficult to get a man to understand something if his salary depends upon his not understanding it."

Kelly Dean Wiseman, General Manager at Community Food Co-op, wrote:

In our 39 years in business we’ve never used the plastic grocery bags: just good ole paper. And ten cents for each bag the customer brings in, which is very popular. Carrot versus stick, as it were.

Yesterday’s Eye-Opener focused on an Inc. story about the connection between public transportation and one prominent retailer - Amazon.

According to the story, “Amazon takes public transportation for its employees very seriously. So much so that the company says it has spent $60 million on public transit in Seattle. And the investment continues: Along with paying $5.5 million toward Seattle's streetcar in 2012, the retailer announced last week that it would invest $1.5 million to increase bus service to its headquarters.”

Indeed, the Inc. story pointed out that the availability of a robust and accessible mass transit system is one of the things that Amazon has made a centerpiece of its requirements when it chooses a second North America headquarters city (dubbed HQ2), and said that “decent public transportation can make a huge difference to the quality of life in any city.”

I commented, in part:

The word “city” is important here, since there seems to be broad agreement on the part of demographers that the US is becoming a more urban-centric nation.

That’s something that a lot of retailers ought to be thinking about as they make plans and move forward. Many retailers are built to be of greatest service to families in the suburbs with several children, living in a house with a basement for storage, and using a minivan or SUV to get around and do shopping. But what happens to these retailers when people move to the city, have fewer children live in an apartment and don’t even own a car?

…We know that some people are in denial about all this. One example of this was reported in the New York Times a while back, when it wrote about political efforts around the country to fight against the bankrolling of mass transit systems that have been proposed in order to deal with specific problems including too many cars clogging up city streets, pollution, and even the propensity by an increasing number of urban dwellers not to own cars. The anti-mass transit say that their position is rooted in a desire for smaller government, and government-backed transit systems require bigger government, and a deep-seeded belief that public transit is anti-freedom. Frankly, I think this argument is silly.
And probably self-serving.

MNB reader Gary Loehr responded:

KC, you leave out the possibility of privately run mass transit.  I would consider myself to anti big government, but not because I don’t think the services are important.  I just don’t think our government is very good at providing them. Government services tend to have too large an infrastructure, overpay for everything and not be consumer focused.  Other than that they do a great job. Industries with government regulated monopolies tend to have a lot of the same issues, since they get rate hikes anytime they aren’t making enough money (think cable companies).  There needs to be a business model for private companies to provide public services, while maintaining the incentives for great service and efficiency.

MNB reader Jenny Keehan wrote:

Of course Amazon is supportive of public transit. More people without cars = more people who need to buy online.

And, from MNB reader Paul Schlossberg:

Many of today's emerging generations apparently want to live in an urban area. Many prefer not to own things, like cars. Thus public transportation matters.

They need stores to be conveniently located where they work and live. Well said about retail brands here being aimed at larger families and suburban locations. Retail brands and CPGs (especially in food and beverage categories) will have to adjust.

In the last 20 years my work took to Europe where retail store checks were on my agenda. Stores with in-city locations were, as expected, smaller with limited selections. What was always different (from U.S. retail) was that packaging and portion-size was focused on smaller quantities. That was especially true for what is described as meal solutions. Europe was way ahead of us on that one.

In recent years in the U.S. in-store merchandising has changed. We see an increasing number of conveniently located refrigerated display cabinets with smaller portion meals, salads and desserts.

The challenge is that the U.S. pipeline, and the center store, is driven by pantry-loading. That means multi-packs and/or multi-portion servings in almost every aisle across the store. Those "big" packages bring in the big tickets at the cash register. Promotions and pricing are targeted at our pantry shelves.

It's not good for the legacy stores and brands that the next generation of households is so different from the past. Those new shoppers do not want (to waste time) shopping in big stores with 50,000 SKUs. And they will not be doing any pantry-loading.

KC's View: