Cash strapped consumers move away from ‘ethical’ shopping

The Times yesterday suggested that ‘ethical’ consumers are abandoning expensive organic and fair trade products as the economic downturn takes hold. The proportion of concerned consumers prepared to pay extra for the most environmentally friendly or ethical product has plunged, while the number who said that they would buy the best-value product regardless of its environmental credentials rose sharply.

This seems to reflect the predictions made during the height of the economic boom.

Despite a drop in sales of organic products, Sainsbury’s is insisting that customers haven’t given up their ethical standards. However, a Populus poll says that the number of concerned consumers who said that they would pay extra for an environmentally friendly or ethical product dropped by 5 percentage points in March to 53 per cent. It has fallen 12 per cent in a year.

The number of concerned consumers who said that they would buy the best-value product regardless of its ethical credentials, shot up 6 percentage points in March, up 12 percentage points in a year, to 47 per cent. Organic food has fared particularly badly. Only 23 per cent of consumers said that they intended to buy organic this year - down from 34 per cent last year.

I personally agree with Justin King, chief executive of Sainsbury’s, who said that organic food producers had not done a good job in communicating what the term “stood for”. I sometimes ask students what they understand by the concepts of ‘environmentally friendly’, ‘fair trade’ and ‘organic’. The last of these terms generates the most confusion.

The big supermarkets have given mixed signals on whether consumers were switching away from ethical products - Asda and Morrisons have said that they have observed the trend but Sainsbury’s says it has seen the opposite.

The Co-operative Group, which is collectively owned, was rated as the supermarket that was dealing best with social and environmental issues. But despite a high-profile advertising campaign, featuring a Bob Dylan soundtrack hailing the company’s ethical record, its rating has not improved in the past year. The “big four” supermarkets - Tesco, Sainsbury’s, Morrisons and Asda - all reported improvements in how customers evaluated their ethical and environmental behaviour. Marks & Spencer witnessed a small decline in how well its performance is assessed.

What do you understand by the term ‘business ethics’? Do you believe the world can be made a better place through what goes into your shopping trolley, or are we missing the point?