Date published: 9 Aug 2007
UK retailers are enjoying the benefits of ethical consumerism, as sales of organic and Fairtrade products boom, according to Euromonitor International's new report "The World Market for Retailing". Furthermore, the popularity of these products looks set to continue as consumers become increasingly aware of ethical issues.
The new report "The World Market for Retailing" highlights that sales of organic products in the UK exceeded £1.2 billion in 2006. A further impressive growth of 50% is also expected over the next 5 years, with annual sales reaching £1.9 billion by 2011, according to Euromonitor International.
The expansion of mass media has played an important part in increasing consumers' exposure to environmental and ethical issues, leading to consumers changing their behaviour as a result.
Consumer consciences drive growth
The dramatic rise in the popularity of Fairtrade and organic products has come about as consumers, now more aware of global ethical issues, have become more willing to think and act ethically. Magdalena Kondej, Retail Industry Analyst from Euromonitor International comments, "This change in consumer behaviour is underpinned by rising disposable income and the guilt that consumers feel at the affluence of Western countries in relation to less developed countries".
"Consumers are also feeling increasingly isolated from, and let down by the political system," continues Kondej. "They are increasingly looking for ways to give their lives more political and ethical meaning, which has also affected day-to-day activities, including shopping".
Retailers exploit growing range of ethical products
This change in behaviour is having a strong impact on all consumer goods, which UK retailers will increasingly respond to, according to "The World Market for Retailing". Sainsbury's, one of the first retailers to catch on to the organic and Fairtrade food wave, is now continuing its strategy with non-food items. In 2007 it launched a range of clothing made from fair trade certified cotton following Marks and Spencer, which introduced its first ethically sourced clothes in 2006. Even hard discounters are adapting their offering in light of the rise in ethical demand. Lidl, for example, works with the fair trade organisation, TransFair, to develop fair trade products under its private label, Fairglobe.
Traditionally, Fairtrade and organic products have been limited to the food, and more recently, clothing aisles, where they have been particularly in demand. However, in the future, ethical awareness looks set to affect a growing range of product categories as consumers consider the social and environmental impact of the manufacture and distribution of goods in broader terms.
Retailers will be forced to assess their long-term sourcing strategies across a wide range of retailing categories, including home furniture, household goods, and health and beauty. Magdalena Kondej from Euromonitor International comments, “While there have been outbreaks of ethical consumption in the past, it seems the current trend is more firmly established and inclusive than before. As such, retailers will have to consider the ethical implications of their entire product offering in the future”.
For further detail about this article and other related findings, please visit Euromonitor International by clicking here.