spending

The plastic bag ban has again been in the headlines in recent days. It is 12 months since Coles and Woolworths ceased offering single-use plastic bags to shoppers, while every state and territory other than New South Wales has either implemented a ban or is in the process of doing so.

As it has been arguably the biggest change to shopping behaviour in a generation, the reform has proven to be a topical issue. An economic, retail and environmental policy all rolled into one has certainly left few people sitting on the fence.

As with any major reform, it was always going to have an impact on the shopping habits of consumers. However, recent Treasury analysis suggesting that the bag ban has reduced grocery consumption, thus led to poorer than otherwise retail sales is misguided.

There is no denying that retail has had a challenging first-half to 2019. Sales growth has been sluggish, consumer confidence has been lower than previous years and the general Australian economy has under-performed. But the idea that this is solely, or in large part, due to the plastic bag ban simply doesn’t stack up.

The Reserve Bank of Australia (RBA) has had interest rates at record lows for years before either governments or supermarkets began phasing out the plastic bag. The recent reduction in the cash rate by the RBA – in a bid to boost consumer confidence – would have occurred regardless of the shift to reusable bags.

Moreover, while grocery outlets no longer offering single-use bags may result in some shoppers buying fewer items in a single trip, this does not mean they are spending less at the supermarket. Whereas previously consumers would stock up in one fell swoop, people are now making multiple trips to the shops each week.

In other words, people are simply changing the way they do their shopping.

There have certainly been teething problems as the public adjusts, but some perspective is needed before everyone frets about the removal of plastic bags being to blame for a slow sales period. There are many variables that affect retail sales and when consumer spending increases again no one will be questioning the transition to reusable bags.

All the best for the week ahead!