Woolworths says plastic bag ban has been painful and has hurt sales

Australians are among the most challenged by the ­removal of single-use plastic bags from supermarkets, says Woolworths chief.

Woolworths CEO Brad Banducci admits the plastic bag move has hurt sales. Pic: AAP

Australian shoppers are among the most challenged by the ­removal of single-use plastic bags from supermarkets, says Woolworths chief executive Brad Banducci, who has described the transition to reusable bags across most states since July as “more painful” than feared.

Speaking to investment analysts yesterday after the release of Woolworths’ latest financial results, Mr Banducci said the negative reaction from shoppers since July, when single-use plastic bags were removed, had taken Woolworths by surprise.

“The impact and the time for customers to get used to it has been greater than any of us have thought,’’ he said. “And we do have a few things we would do differently the second time around, in terms of how we try to ­holistically solve this for our customers.’’

That “pain” showed up in Woolworths’ sales performance for the seven weeks from July 1, when the supermarket group suffered an unexpected hit that left sales spluttering, partly blamed on the problematic transition to reusable bags.

Mr Banducci said Australian shoppers had reacted more negatively to the move than customers elsewhere. Consumers in South Australia and Tasmania, which were first to shift to reusable bags, also reacted better. “It was and has been a more painful adjustment than we thought and out of line with what we have seen in South Australia, Tasmania, the UK, France, South Africa,” he said. “It was a lot harder than what we thought.’’

He said he thought it would take eight to 10 weeks for shoppers to adjust.

Mr Banducci said the unexpected slowdown in sales was driven partly by customers taking longer to pass through checkouts, and as some shoppers filled bags with fewer items.

Later Mr Banducci told The Australian it was typical for ­entrenched shopper behaviour to take some time to change.

“We know that it takes eight to 10 weeks, maybe a few weeks longer than that, to get into new habits. Forming new habits is hard, right?’’ he said.

“So we are still early in the process and we are actually seeing our shoppers form new good habits and we have got a whole series of programs in place to ­reward them and thank them for forming these habits. It is still very early in the process and it has been very challenging.’’

Woolworths said it expected sales to improve in the next six months.

Last week Coles, the nation’s second-biggest supermarket group, also said the plastic bags move had tarnished sales in the first few weeks of the transition.

The boss of Perth-based conglomerate Wesfarmers, Rob Scott, said some Coles customers had struggled with the transition, prompting Coles to extend its period of free reusable bags.

From next month, the cheapest reusable bags will cost 15c at Coles. Woolworths has charged 15c for bags since last month.

The plastic-bag ban comes despite an inquiry commissioned by the federal government 10 years ago that revealed less than 0.2 per cent of landfill was made up of discarded plastic bags, and that charging people for bags was an uneconomic and weak way to reduce litter.

The Productivity Commission inquiry, released in 2006, found the case to phase out the plastic bags “particularly weak’’.