This briefing note is intended to analyse the Coles ethical issues in its Little Shop promotion. Coles has started the promotion on July 2018 while it was asking the customer to bring their own bags to store. The collectables Little Shops are made from soft and hard plastics and individually wrapped in a soft plastic. The toys are not recyclable and the company expects people to keep the toys but unfortunately in some cases, they end up in the landfill. People can recycle the wrapping in the store but no option has been provided for recycling the toys. Coles is contributing to environmental harm, plastic waste, and unethical marketing by targeting to children. Each if the issues has been discussed more in this briefing note.
The Little Shop campaign has boost the company’s sale and profit margin but it could do it in a better way rather than producing more plastic. The collectables, similar to this are used in Woolworths and some European countries. Some recommendations have been included at the end of this note to help the organisation in reducing plastic waste.
Coles Supermarkets Australia PTY Ltd. operates in Australia since 1914. Coles serves its customer throughout Australia and is headquartered in Victoria. The Company operates as supermarket, retail and customer service chain by offering food, drinks, home, garden, health and beauty product, and liquor merchandise, plus insurance services. Coles’ vision is to “become the most trusted retailer in Australia and grow long-term shareholder value’’. Coles Sustainability report (2019) indicates that the company’s strategy is focused on sustainable products, sustainable communities, and sustainable environmental practices. Coles states in all its report that is committed to environmental sustainability and implemented the ban of plastic bags but using a line of ‘‘Little Shop’’ plastic collectibles introduced more plastic and marketed to children. However, there are many other and better marketing strategies, Coles can use that would benefit the environment and children’s health. Coles’ expectation is to keep the little shops forever but no one can do and instead they end up in landfill, contributing to plastic pollution and there is also a choking hazard for young children (Derksen 2019).
John Durkan, Coles managing director mentioned that the Little Shop campaign helped the company to boost sales 5.8 per cent in September quarter and it was more than what the company was expecting (Powell 2019). Coles’ spokesperson states that their customer research shows that customers who collected minis last year rather than throwing them out, 94 per cent have kept them or given to family or friends. Coles says after huge demand they brought back the range for the second time. Coles also introduced RedCycle program that is one of the largest recycling program operated by retailor to its customers to return the wrappings for recycling. The toys themselves cannot be recycled but the wrapping can if returned to the stores. Coles says “As part of our commitment to better environmental outcomes, RedCycle allows customers to recycle soft plastics in provided bins at their nearest Coles store to be repurposed into outdoor furniture for pre-schools and primary schools’’ (Coles-Annual-Report 2019).
Woolworths also launched similar plastic collectables, called ‘Ooshies’. It is a line of 24 Lion King that can be affixed on the end of a pencil but it is another way of producing extra plastic. Recent move of Australian Supermarkets into the world of collectables is the similar approach to collectables with the retailers in the US and Europe. Tesco, the UK-based supermarket chain, revealed a line of Marvel Superhero collectable stamps last year. This global approach of marketing will inspire Australian supermarkets to the collectible promotions and it can get more complex (Powell 2019).
The Change.org petition has highlighted that Coles released Plastic Free July on 2018 and soon after that introduced the Little Shops. It is the time that many people are using their own bags in store, not using straws, and choosing less packaging on their food. Sara Coates has launched the petition by collecting more than 28,000 signatures. Sara argues that Coles is handing out plastic junk that ends up in landfill or ocean and it is not accepted by people who care about the future of the planet. Environmental groups and health sponsors have blamed and denounced the Little Shop promotion as environmentally harming and commercially exploitation of kids (Powell 2019).
According to Carroll’s four-part definition, the corporate social responsibilities of a business include: economic, legal, ethical, and discretionary responsibilities. The ethical responsibilities include emerging values and norms that societies expects from a business to meet and it can be more than standards required by law. In this case society expect the company to not pollute the environment and manage its waste (Carroll et al 2018 pp. 35-39).
Stakeholder’s view point
Coles stakeholders include: shareholders, customers, employees, supplier, government, and community. According to the Carroll’s CSR pyramid, organisations have a responsibility to be economically viable and as the promotion generated more sales and increased the profit margin, thus the company is meeting its shareholders and expectations. The suppliers also benefit economically by the sale because the extra sale requires more product supply, therefore their expectation is been meet too. From the customers view point who were collecting the minis Coles decision was beneficial because they have been collecting free toys and physiologically involved in the promotion to get a surprised free toy by their shopping. Form the other customer group who were not collecting them, the decision was detrimental and unethical. The promotion has targeted kids and their pester power which is not accepted by some customers and especially those who care about environment because the company is producing plastic and does not meet its ethical responsibilities (Stein 2019).
From the employees view point, most of Coles’ employees were involved in the promotion themselves and liked the promotion regardless of the harms it had for the environment. In some reported cases, employees stole the rare toys and sold them online (Carey 2018).
Most people in the community believe that the little collectables are not right and Coles is not ethically responsible by promoting them. Coles launches a plastic campaign and on the other hand, donates to Clean Up Australia charity which indicates that the corporation is laughing in the face of greenwashing and do not care about environment but its profit margin. It is not ethically accepted because the money they donate to the charities cannot buy back the waste they made and community is aware of that. Every business is responsible to comply with the government laws in the society. However, Coles has not broken the law by promoting the mini collectables but the environmental damages that it has created will involve the government to manage and clean the environment. Every corporate and business must be responsible for its decisions and embed ethical decision making into every steps of its development. The business should think about its decisions effect on planet, people and profit. However, balancing the priorities of people, profit and planet is not easy and cannot be perfectly made but every business can pause to reflect how it can do better and balance the benefits and costs (Barry 2019).
The Little Shop collectables have been targeted to children like McDonalds Happy meals and Woolworths Ooshies. Brands target the children because they know that brand loyalty starts young and they include themselves in this range to ensure they have built their next generation customers. Most of brands pay to be included in the promotions targeting children (Trotta 2018). The ethical questions arise here. Is it ethically right to engage children in marketing purposes? By looking at Coles Little Shops and marketing for some unhealthy brands such as Tim Tams and Nutella, it’s aimed at a fun exercise but it is not fun for parents who their kids throw a tantrum in the shop when they refuse to buy those products. The brands who targeting children know that nine out of ten tired parents just buy what kids want to appease them. Laura Trotta as one of Australian leading home sustainability experts, asks parent who believe this type of marketing is not ethical to voice their opinion and write to Coles Head of Marketing (Trotta 2018).
Jane Martin, The executive manager of Obesity Policy Coalition at Cancer Council Victoria, is concerned with all of unhealthy foods represented in the Coles Little Shop promotions. She has labelled the promotion as “commercial exploitation of children”. She agrees with Trotta that brand loyalty starts young and these companies are creating familiarity with their brands amongst children to ensure they built their future consumers. According to Australian Food and Grocery Council’s guidelines on advertising to children, companies are committed to: “only advertise healthier choices to children and encouraging a healthy lifestyle through good diet and physical activity”. Martin says Coles promotion has rounded the commercial code of conduct about advertising to children and Coles has not meet the self-regulation criteria (Australian Food & Grocery Council 2019).
Peter Hellier and Jamie Lepre the environmental activists, argue that Coles is teaching a dangerous lesson to children to collect useless plastic toys and consumerism by its Little Shops (Barry 2019).
The Environmental Harm
Coles introduced its Little Shop Collectables on July 2018, the month known as Plastic Free July. As mentioned earlier Coles argues that the plastic toys would not end up in the trash. Even if they are right but still the environmental harms have already taken place in form of the chemical pollution and greenhouse gases effected by the toys production and shipment, energy used for production and waste of their packaging (Coast 2018).
Peter Hellier and Jamie Lepre, have called for a boycott of Coles and its Little Shops promotion. The plastic minis are made from different materials such as plastic, foam, paper, and cardboard and some of them including bottled water and mini bananas, are made from hard plastics which are not recyclable. Jeff Angel, the executive director of the Boomerang Alliance, argued that most of these mini collectables have been thrown away and found their way to landfill. This promotion is an example of mad marketing because they did not care about resource waste and environmental pollution. Angel says the promotion undercuts the Plastic Free July program and all other measures they have put in place to reduce the plastic waste such as cutting down the plastic packaging of fruit and putting recycle bins for soft plastics in stores. Angel believes Coles is doing one good thing and on the other hand introducing environmentally damaging products. The Little Shop minis are wrapped in soft plastic that can be recycled in store but for the plastic toys, no recycling option has offered by Coles. Although Josh Cole, Planet ark’s communications manager, says most of these hard plastic toys are not conventionally recyclable and when the new set has released the old ones have thrown out (Spring 2018).
Laura Trotta, argues that the Little Shop promotion has destroyed Coles credibility because they want people to recognise them as responsible corporate citizens but at the same time they introduce free plastic collectables that most of them end up in landfill. By introducing the Little Shops to customers and the society, it was difficult to believe that Coles is serious about reducing plastic pollution and is responsible for environment (Trotta 2018).
Plastic waste has caused a pollution in the marine and coastal environment which is very challenging restoration. Marine plastic pollution, like to any other environmental issues is transboundary and solving this issue is very complex and it is unlikely to return to the same condition it has before plastic pollution (Vince 2017).
According to National Waste Report (2018), in 2016- 17 about 2.5 Mt or 103 kg per capita plastic waste have been generated. Only 12% recycled, 1% sent to an energy from waste feasibility and the rest 87% sent to landfill. Every year about 8 million tonnes of plastic are dumped in the oceans. Marco Lambertini, Director General of WWF-International says the way people currently produce, use and dispose plastic is essentially broken and defective. The system is fundamentally broken and lacks in accountability, and the way it operates guaranteed to increase the volume of plastic leaking into nature and by continuing this system the plastic pollution in oceans will be doubled by 2030. A global petition has been launched by WWF to call for a legally binding deal on marine plastic pollution (Don’t Let Nature Go to Waste 2018).
Coles Little Shop collectables, come in an individual packet and what is in each pocket is a surprise for kids and drives them to purchase more and collect to get the full set. To complete the whole set families need to buy and collect hundreds to be able to have the full set. There was some swap days in Coles stores for people to swap their extra minis and some people were swapping or selling them online. From a profit point of view the campaign was an absolute success for the supermarket. According to the analyst’s report at Citi, the Little Shop worked as a driving force and helped Coles to outperform its competitor Woolworths for the first time in two years. Coles was outperforming and driving up its profit margins even by reducing the number of discounts in store (Bell 2018).
The plastic pollution problem is very serious and requires an integrated, comprehensive approach that promote scientific expertise, community engagement and participation, and marketing strategies in order to reduce it (Vince 2017). Carroll says “nature itself is a polluter and destroyer and with a full range of toxic heavy metals is continuously polluting many bodies of water and airsheds”. Humans’ contribution to the environment pollution makes it hard to look after the environment. Kohlberg’s moral development model can help to identify the attitudes related to the environment development level. At preconventional level, humans and organisations are concerned with their own species and habits. At conventional level, might require some appreciation of nature where it is commonplace. At postconventional level, environmental ethic requires more mature attitude which can be more universal and consistent (Carroll et al 2018 pp. 471-472).
Using the consumer decision making process is one way that can help organisations to make ethical decisions for their marketing process.
Coles, for instance could look at what it customers needed and what they care about more. Then it could gather information from all stakeholder about what product to choose. After that could evaluate that is the product viable, sustainable, and recyclable. Then could make the decision and purchase the product for its marketing promotion and always required to do postpurchase review that if all stakeholders are satisfied or dissatisfied (Professional Academy 2019). For example, after the first Little Shop campaign, Coles could run a survey and seek different opinions about its promotion and when realised that the promotion is contributing to the environmental harm could replace it with another option like offering free fruit or healthy food to children instead of free plastic toy.
- Australian Food & Grocery Council 2019, Responsible Advertising and Marketing to Children, viewed 30 September 2019, <https://www.afgc.org.au/industry-resources/rcmi-and-qsri>.
- Bell, M 2018, ‘What brands can learn from the Coles Little Shop craze’, Ad News, 4 October, viewed 30 September 2019, <https://www.adnews.com.au/opinion/what-brands-can-learn-from-the-coles-little-shop-craze>.
- Barry, O 2019, ‘Coles’ and Woolworths’ collectables campaigns are a reminder to stop the greenwashing’, Mumbrella, 14 August, viewed 1 October 2019, <https://mumbrella.com.au/coles-and-woolworths-collectables-campaigns-are-a-reminder-to-stop-the-greenwashing-592459>.
- Carey, A 2018, ‘Furious parents savage supermarket after staff members accused of swiping collectables’, News.com, 5 September, viewed 30 September 2019, <https://www.news.com.au/finance/business/retail/furious-parents-savage-supermarket-after-staff-members-accused-of-swiping-collectables/news-story/14066e060e605772b109fb7f6f0a328e>.
- Carroll, A, Brown, J, & Buchholtz, A, 2018, Business & Society Ethics, Sustainability & Stakeholder Management, 10th edn, Cengage Learning, MA USA.
- Coast, C 2018, ‘DESIGN AND ETHICS — A RECENT CASE STUDY: COLES LITTLE SHOP’, Medium.com, 31 August, viewed 1 October 2019, <https://medium.com/@creativecoast/design-and-ethics-a-recent-case-study-coles-little-shop-7b70a9b9dff4>.
- Coles-Annual-Report 2019, Coles Group.com.au, viewed 29 September 2019, <https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/file/Coles_Annual_Report_2019.pdf>.
- Coles-Sustainability-Report 2019, Coles Group.com.au, viewed 29 September 2019, <https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/file/Coles_Sustainability_Report_2019.pdf>.
- Derksen, A 2019, ‘Stop Coles from contributing to plastic pollution’, Change.org, viewed 30 September 2019, < https://www.change.org/p/coles-your-little-shop-toys-are-damaging-the-environment>.
- Don’t Let Nature Go to Waste 2018, WWF- Australia, viewed 2 October 2019, <https://www.wwf.org.au/get-involved/plastics#gs.6r1az3>.
- Professional Academy 2019, Marketing Theories-Explaining the Consumer Decision Making Process, weblog, viewed 1 October 2019, < https://www.professionalacademy.com/blogs-and-advice/marketing-theories—explaining-the-consumer-decision-making-process>.
- Powell, D 2019, ‘Coles’ Little Shop campaign could return, and return, and return’, The Sydney Morning Herald, 18 July, viewed 29 September 2019, <https://www.smh.com.au/business/companies/coles-little-shop-campaign-could-return-and-return-and-return-20190718-p528gu.html>.
- Spring, A 2018, ‘Mad marketing’: Coles Little Shop for children undercuts plastic bag ban, critics say’, The Guardian, 18 July, viewed 1 October 2019, <https://www.theguardian.com/business/2018/jul/18/mad-marketing-coles-little-shop-for-children-undercuts-plastic-bag-ban-critics-say>.
- Stein, L 2019, ‘Ooshies and Little Shop: Why are customers obsessed with free collectibles?’, ABC News.com, 1 August, viewed 29 September 2019, <https://www.abc.net.au/news/2019-08-01/why-are-people-obsessed-with-ooshies-and-supermarket-collectible/11370584>.
- Trotta, L 2018, ‘3 Reasons you should rethink Supermarket Collectables’, weblog post, 24 July, viewed 29 September 2019, <https://lauratrotta.com/supermarket-collectables/>.
- Vince, J 2017, ‘Plastic pollution challenges in marine and coastal environments: from local to global governance’, Restoration Ecology, 1 January, viewed 1 October 2019, < https://onlinelibrary.wiley.com/doi/abs/10.1111/rec.12388>.
- WWF releases report on global plastic pollution crisis 2019, WWF, 5 March, viewed 2 October 2019, < >.
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