At the start of July 2018, selected national retailers made a decision to remove single-use plastic bags from stores. In this latest Hot Topic from, IRI assesses what the implications of the move could be, and what retailers can do to mitigate some of the negative PR surrounding the phase-out.

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HOT TOPIC
What happened? What prompted the move? Are all states backed by law?
Source: SBS, ABC
Destructive impact on sea-
life has created a groundswell of
public alarmism and an all
out “war on plastic”
16m
are estimated to end up in the
natural environment
4bn
plastic shopping bags are used in
Australia every year
Single-Use Plastic Bag Phase-out:
Background
By the end of 2018, all states
except NSW will have
legislation related to plastic bag
restriction
State legislation in QLD
came into effect in July 2018, so
major retailers have pushed the
change nationwide
Woolworths, Coles,
and IGA stopped supplying
single-use plastic bags in
June/July 2018
The recent national phase-out was induced by broad stakeholder influence

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Partnered with
Boomerang Bags (a
not-for-profit) on free,
locally made bags
HOT TOPIC
Single-Use Plastic Bag Phase-out:
Grocery retailer initiatives
All profits go to
Woolworths
Junior Landcare
Grants Program -
encouraging young
Australians to play
an active role in
ensuring the
sustainable future of
their environment
More durable reusable bags designed by
local schoolchildren, with 10% of sales
going to a range of charities
Aldi has only ever stocked
reusable bags, so Aldi
shoppers (~70% of Australian
households) should be prepared
Source: woolworths.com.au; coles.com.au; iga.com.au,
IRI Shopper Panel MAT to 27/05/18

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HOT TOPIC
Single-Use Plastic Bag Phase-out:
Consumer & Shopper sentiment
71%
of shoppers
agree with the
initiative, which
aligns with the
environmentally
mindful sentiment
expressed by
Australian
households*
45%
say taking own
bags will be a
hassle, which
has been
evident from
transition
challenges
(e.g. ‘bag rage’)*
58%46%
of shoppers
already use
reusable
bags,
although the
frequency
of use likely
varies*
The majority of Australians show a willingness to participate
Source: IRI Shopper Panel Psychographics,
*Canstar Blue, 2,200 respondents
55%
of Australian
households try to
buy environmentally
friendly products
have been
saving bags
to use,
suggesting that a
plurality of
shoppers were
going to be
unprepared
for the change*

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HOT TOPIC
Belief that scheme
exists to help
retailers
maximise profit
– backed by
pockets of media
Dog owners
urged to use other
plastic bags, which
negates
positive impact
of initiative
Criticism over
execution
Confusion
around why
Source: IRI Analysis, *smh.com.au, Inside FMCG, news.com.au
In-store messaging
focuses on when
the change was
happening,
not why, leading to
a negative reaction
from shoppers
Inadequate initial
stock management
has led to a
shortage of
reusable bags in
some stores
Single-Use Plastic Bag Phase-out:
The negatives
?
Shoppers were vocal
about discontentment…
“…stores were inundated with
complaints from customers
who refused to pay for bags or
did not have enough of their own
stored up.”*
Despite generally positive sentiment, some backlash exists
…leading to a
short-term reprieve
by the retailers
06/07/18
29/06/18

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HOT TOPIC
Rolled out nationwide
October 2015
(following pilot since
Oct 2011)
Single-use bags
still available;
shoppers charged
nominal fee
“…some people who previously used
free plastic bags for collecting and
disposing of their rubbish are now
having to buy bin liners …”
- IRI UK Head of Strategic Insight
Single-Use Plastic Bag Phase-out:
UK case study
How was it introduced? How was it received? Other impacts
UK-wide initiative
Enforced by
almost all
FMCG retailers
-87%
reduction
in single-use
plastic bags
At the end of Year 1
Adding a combined
incremental
£97m revenue
+113%
increase
in reusable bags
Source: IRI UK MAT to Oct 2016, *gov.uk
Bin Liner
category
+8%
Over the next 10 years, expected
benefits are*:
 £780m added to the economy
 £730m raised for good causes
 £60m saved in litter clean-up costs

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HOT TOPIC
Could be an inhibitor to
online growth as some
shoppers must pay per
delivery even if not using bagsAll retailers will see a boost in
sales as bags are scanned
through the checkouts
Single-Use Plastic Bag Phase-out:
Implications & Recommendations
Short-Term Implications Long-Term Implications
Recommendations for retailers
Reusable bags June ‘18
$55m
$115m*
Estimated value June ‘19
Source: IRI Analysis, IRI MarketEdge MAT to June 2018, *based on UK growth
Reward shoppers for using
reusable bags – loyalty card
points/offers
Remind shoppers of the
benefits – frequently highlight
positive environmental and local
impact
$