Plastic bag ban backlash hurting Coles
THE chief number cruncher at the company that owns Coles has conceded for the first time that phasing out single-use plastic bags has hurt sales at the supermarket chain.
Clarifying earlier comments, Wesfarmers chief financial officer Anthony Gianotti has acknowledged that forcing customers to use their own bags or reusable plastic bags has weighed on turnover, although he did not quantify the affect.
Mr Gianotti also admitted the move could have been handled better.
His comments confirm the fears of analysts that Coles will suffer a dent to its sales momentum just as Wesfarmers prepares to spin the chain off into a separately listed company.
Mr Gianotti said that, after the removal of single-use plastic bags at Coles stores on July
1, customers had moved more slowly through check-outs and taken time to adjust to the new way of shopping.
It is the first time either Coles or rival Woolworths have spoken publicly about the impact of the removal of plastic bags on their bottom lines. Wesfarmers is due to release its full-year results next week.
Mr Gianotti also dismissed suggestions Coles would eventually profit from selling 15c reusable bags, saying any money made would be “marginal at best – absolutely marginal”.
Following complaints from some shoppers, Coles has been handing out reusable bags for free, but will start charging for them on August 29. Rival Woolworths has been charging 15c for its reusable bags since last month. Woolworths has yet to disclose if it has lost any sales momentum but, given Coles’ experience, it would be unsurprising.
“Certainly one of the reasons why we extended the free plastic bags was because customers were taking some time to adjust to that and there was no doubt there was an impact (to sales),’’ Mr Gianotti said yesterday.
He said he could not quantify the size of that sales hit.
“It is having an impact on sales, yes, I’m not going to go into the specifics ... When we looked at the overall numbers, there was definitely an impact.”