Leaked memo: Real reason behind Coles’ backflip
COLES sparked backlash over its hasty backflip on giving away reusable plastic bags but a leaked internal memo has revealed not all is as it seems.
The assertion conflicted with the organisation's earlier statement to news.com.au that the purpose of the giveaway was to help customers transition to bringing their own bags.
Coles and Woolworths removed single-use plastic bags on July 1 in stores in Victoria, NSW, Queensland and Western Australia and announced they would hand out reusable bags for free for a limited time.
The cut-off date was August 1, but when the day came, Coles confirmed to news.com.au it would continue to offer the "Better Bags" - which normally cost 15 cents - for free in eastern states and Western Australia until further notice.
"When Coles phased out single use plastic bags on 1 July in QLD, NSW, Victoria and WA, some customers told us they needed more time to make the transition to reusable bags," a Coles spokesman told news.com.au last week.
"We will continue to listen to our customers and our teams members on an ongoing basis to assess when customers have become accustomed to bringing their own bags, and will provide them with as much notice as possible."
But fierce backlash from environmental groups - which claimed free bags gave customers no incentive to bring their own - saw the supermarket back-pedal on its decision and announce the next day that it would end the free bag offer on August 29.
Fairfax reports that the real reason behind the original decision to extend the giveaway was to get customers through their check-outs faster while they experienced busier than normal trading thanks to its Little Shop toy promotion.
"As you know, teams have been working hard to bring Little Shop to life for our customers and we've had a great response across the country," a leaked memo obtained by Fairfax read.
"To help make life easier for our team and customers during this busy time, we have made the decision to extend the complimentary 15¢ Better Bag offer until further notice.
"This means you can focus 100 per cent on serving customers quickly through the registers. It also gives our customers additional time to form the habit of remembering to bring their own reusable bags."
Just two days after the July 16 launch, complete sets of Coles' range of miniature versions of popular products like Nutella, Vegemite and Weet-Bix were fetching more than $300 on eBay, and individual toys were selling for as much as $15 each.
Tens of thousands of people have signed up to various groups on Facebook dedicated to swapping the tiny toys to complete the set of 30 before the marketing promotion ends in six weeks.
"The customer response to our Little Shop collectable offer has been fantastic, and we're pleased to see people are finding ways to build and complete their collections," a Coles spokesman said last month.
"Little Shop collectables are still available at all Coles supermarkets, with customers able to collect one free with every $30 spent."
The promotion, which aims to emulate the success of Woolworths' animal cards and Marvel superhero discs, was criticised by environmental groups and some customers coming on the heels of the July 1 plastic bag ban.
"It feels as though this has not been put through a sustainability lens at all," Boomerang Alliance deputy director Jayne Paramor told SBS News. "From our perspective, it really shows there is a lack of focus on the sustainability side of some of these decisions that are being made."
On Coles' Facebook page, one customer wrote, "So a week after Coles stops giving out plastic bags, they're now giving out useless plastic junk for free instead?! Is this a joke?"
In response, Coles said the idea was for customers to "keep and collect them rather than throw them out".
"When customers are at the supermarket they have a choice as to whether they would like to receive a mini collectable or not and customers are able to recycle the wrappers at their nearest store through our in-store REDCycle program," the company wrote.
The promotion was largely funded by the brands themselves and developed by marketing company Unga, which successfully rolled out the idea in overseas markets including The Netherlands, New Zealand and South Africa.
"We know our customers love collectables so we have worked with our suppliers to launch a new collectable campaign in our supermarkets across Australia from Wednesday," Coles managing director John Durkan said last month.
"We have designed them together with our suppliers to be miniature replicas of some of the most loved products on our supermarket shelves. Little Shop features 30 iconic, household brands - including Vegemite, Nutella and Weet-Bix - which are shrunk down into a mini collectable for customers to collect and swap.
"We are aiming to give our customers something fun - a miniature to collect and enjoy. To make collecting even more fun for customers, we have a range of additional items for sale including collector cases, miniature shopping baskets and trolleys, and a miniature shopfront."
Mr Durkan said Coles would also be holding a "Swap Day" in August at selected stores to help customers complete their collections before the six-week promotion ends.
Citi analyst Brian Raymond predicted the Little Shop promotion could boost Coles' first-quarter like-for-like sales by 50 to 100 basis points, narrowing the gap to Woolworths further.
"Little Shop is a collectable campaign which has been run successfully in several countries, including The Netherlands in 2012, New Zealand 2013 and 2014, and South Africa in 2016 and 2017," he said in a client note.