Despite concerns about the viability of ethical consumerism in a recession, many ethical retailers are reporting growth in the fourth quarter of 2008, with further growth projected for 2009. So will the global economic downturn hit ethical retailers, or will consumers spending continue to favour products with a conscience?
In recent years, we have seen the rise of big Fairtrade brands selling clothes, food, drink among other things. There were warnings from Phil Wrigley, executive chairman of retailer New Look at a meeting of the Ethical Treatment Initiative in October, who said that consumers under economic pressure tended to concentrate on self preservation and less about others.
A report recently published by the Co-operative bank suggests that ethical consumerism will continue to grow, even during times of economic hardship.
The report says that the ethical market in the UK was worth 35.5 billion pounds, up 15 per cent from 31 billion in the previous twelve months. The report cites the impact of green legislation as a key factor to drive sales up in 2009. Government initiatives promoting energy efficient boilers and light bulbs are ensuring these markets continue to grow.
The economy will always influence consumer spending, but the Co-op report highlights how government action has stimulated the markets, saved consumers’ money and protected the environment.
Even smaller ethical retailers are benefitting. Gateshead-based Ethicalsuperstore recorded sales of 500, 000 pounds in December, a 50% increase on sales during December the previous year. 2009 has kicked off with sales up 60%.
They have attributed the growth to its range of 4,000 ethical gifts, eco-friendly gadgets and organic fair trade produce. They increased staff levels from 25 to 39 during 2008.
Andy Redfern, CEO and co-founder, said: “We are delighted with these results and are pleased to see strong growth despite what seems a constant stream of bad news about retailing at present.
“The cynics that said consumers would drop their ethics when the crunch came have been proved wrong. People care about the world they live in – limited resources just make them even more careful in choosing a retailer whose ethics are more than skin deep.”
Ethicalsuperstore was founded in 2004, evolving from a web and e-marketing consultancy, to running an online shop selling fair trade, organic and eco-friendly products and services.
Mr Redfern said: “Ethicalsuperstore dot com’s mission is to become the ‘ethical Amazon’ – the number one ethical e-business.
“We are especially proud of these results, given that they were achieved with a lower marketing spend than the previous year and during poor market conditions.
“The company is confident it will see continued growth in 2009 despite the gloomy economic predictions.”
Cafedirect is the UK’s largest Fairtrade hot drinks company, with experts in tea, coffee, sustainable development, climate change, and responsible supply chain management.