Conference: Is responsible retailing a contradiction in terms?

by Stephen Tall on September 14, 2008

Being thrown in at the deep end is usually the best way to find out about a topic; and it was in this spirit that I cheerfully agreed to chair the Cooperative’s fringe debate which posed the question in the headline. I don’t pretend specialist knowledge, but when I thought about the subject I realised quite how it strikes to the heart of so many bread and butter issues of importance to the public, and challenges us to think how liberalism can help make our lives better.

Much of the fringe focused, understandably enough given the Cooperative’s sponsorship, on issues to do with food (farming supply chains, waste, packaging). But of course retailing encompasses so much else besides:
should the energy companies be taxed, or otherwise made to invest in helping the public reduce their fuel bills;
how can companies reduce their carbon footprint, whether by altering their own trading practices (eg, reducing car and air travel), or by reforming consumer behaviour (eg, charging for plastic bags);
what more can be done by the drinks, tobacco and gambling industries to reduce excesses which impact not only on the individuals but also their families, friends and wider society;
can more be done to promote healthy living, combating the UK’s fatty foods-induced obesity, and does that include more organic farming?

What is responsible retailing? Are companies promoting corporate social responsibility because they really, truly believe in it: or because it makes sound business sense? And does their motivation matter, if the outcomes are beneficial to communities?

And from a liberal perspective, does responsible retailing put too much onus on companies to solve the problems created by individuals’ consumption? Are we asking companies to solve our own problems for us? Isn’t it for consumers and for government to take action, rather than leave it to the corporate sector?

These were the issues grappled with by Andrew George, Lib Dem MP for St Ives; David Boyle, fellow of the New Economics Foundation; Shane Brennan of the Association of Convenience Stores; and Duncan Bowdler from The Cooperative Group.

Andrew noted that supermarkets are behaving rationally as we would expect in a free market; to blame them is to miss the point – there needs to be some element of regulation (through the ombudsman and grocery trade regulator) if smaller suppliers are to be able to thrive in a market dominated by the ‘big four’. David also examined the trading practices of the supermarkets, which he argued had become oligopolistic through preferential trading conditions, declaring that responsible retailing is irrelevant if their stranglehold undermines the viability and diversity of local town centres.

Many of the audience’s questions focused on the role of the Cooperative – most notably, there was a real sense of grievance from Lib Dems who felt the Coop’s incestuous links to the Labour party was preventing the movement from thriving as it should. Duncan defended the Coop’s stance, noting that all its political donations were declared, and arguing that it was up the movement’s members themselves to say if they wanted to disaffiliate from the Labour party. (But warned that any such attempt would meet with stiff opposition).

But there were tough questions, too, on the amount of food packaging – we all want to reduce plastic bag use, but should a local convenience store charge for a bag to a loyal customer who’s forgotten to bring one of their own? – as well as on out-of-town supermarkets, when Duncan almost got shouted down for suggesting it was up to local councillors to stand up for their communities, without acknowledging how many planning powers successive governments have snaffled away for themselves.

Two Devil’s Advocate questions I didn’t use my chair’s prerogative to ask, and which I’ll therefore leave dangling here:

> It’s easy to rail against the supermarket behemoths: but of course their very size does allow for bad practise to be more readily identified, and for any government regulation to have a far more wide-reaching effect;

> Does Fair Trade in reality subsidise loss-making and unproductive economic activity in third world countries when those countries would actually be better off focusing on productive activities in which they have a comparative economic advantage?