How Reusable Grocery Bags Help Retailers With Cost Reduction

| By Liz Alton

You already know that embracing reusable grocery bags helps the environment β€” but to make this switch even sweeter, the numbers show that there’s a business case for them as well. A full embrace of reusable bags can result in an almost instant cost reduction.

Retail brands that eschew the plastic for reusable cloth will have an important competitive advantage when preparing for forthcoming regulations that tax (or even ban) plastic bags. In addition, your consumers are eager to support sustainable businesses, and investing in reusable grocery bags demonstrates eco-friendly brand values and your commitment to the environment. You may even get some new customers out of this change.

According the Center for Biological Diversity, Americans collectively use 100 billion plastic bags a year, and a typical family brings home approximately 1,500 bags each year. The Maine Chapter of the Sierra Club reports that these plastic bags cost retailers an estimated $4 billion per year. That number is remarkably high, making now the time for you to rethink how you use bags in your stores.

Reusable Bags and Shopper Perceptions

Embracing reusable bags shows a brand’s commitment to the environment and the future β€” and can help attract customers that share the same values. A recent Unilever study found that one-third of consumers prefer to do business with brands that have a positive social or environmental impact, while 78 percent feel better when they purchase goods that have been produced in a sustainable manner.

While the research on U.S. consumer perceptions of shopping bags is limited, hints from other countries showcase the potential for widespread adoption. For example, recent research reported by Science Daily found that after a bag tax was introduced in the United Kingdom, about 90 percent of consumers in the sovereign state began using their own bags when shopping. Brands that embrace reusable bags are getting a brand sentiment bump, as environmentally concerned customers look to do business with retailers that embrace sustainable business practices.

How Reusable Bags Have Reduced Costs

Reusable bags are helping retailers find cost reductions in areas they long considered were part of doing business. Disposable bags are expensive, and as many know, retailers often operate on narrow margins. Cutting disposable bags as a line item lowers overall costs β€”and it can even create a revenue stream when customers purchase reusable bags from you.

NBC News notes that in Los Angeles, the average grocery store went from using 2.2 million bags per year to just 125,000 after a 10 cent bag tax was implemented. With an average cost of 2 to 5 cents for plastic bags, and between 5 and 20 cents for paper ones, the savings can quickly add up. Assuming the most conservative costs in the example above, a store can go from spending $440,000 on bags to just $2,500 per year. In an industry with tight margins, savings has a big impact, especially for retail chains with multiple locations.

Changing Futures for Plastic Bags

State and local governments have joined the ranks of foreign countries that are taxing plastic bags or banning them altogether. As The New York Times reports, a bag tax has been implemented in New York City, which was modeled on similar laws in California and other areas.

As environmental sustainability remains a core concern, it’s likely that retailers in different locales around the United States can anticipate similar legislation in the years ahead. Planning now for how to embrace reusable grocery bags can put you ahead of your competitors. What steps can retailers take to get ready?

  • Consider selling branded reusable bags.
  • Offer a small “bag discount” (a few cents per bag) to customers that bring reusable bags.
  • Work with corporate counsel to track bag-related regulations, and plan now for how to phase out bags at affected locations.
  • Have bins for customers to recycle old plastic bags.
  • Hold a contest for the most original tote bag.

By introducing reusable grocery bags at your business, your brand will not only eliminate unnecessary waste and enjoy a sizable cost reduction, it’ll also be prepared for future shifts in regulations β€” showing consumers you’re serious about sustainability and environmental responsibility. It’s a win-win.

Liz Alton
Liz Alton is a freelance writer specializing in technology and business. Building on her work in management consulting, she writes about the retail and commercial real estate markets for Philips. She develops content strategies and original content for national brands, and has published her writing in Forbes, USA Today, The Progressive Grocer, and many other publications. Connect with her on Twitter @beinglizzie.

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