2003: Ethical Consumerism report
Consumer Boycotts Cost Big Business £2.6 Billion a Year
Boycotts by ethically motivated consumers are costing big brands £2.6 billion a year according to the annual Ethical Purchasing Index (EPI) published 8 December 2003 by The Co-operative Bank. The Bank produces the index in partnership with nef (the new economics foundation) and The Future Foundation.
According to the EPI, which is designed to act as an ethical spending barometer, consumers are deliberately avoiding products from companies that they believe act wrongly.
The Bank's research shows that in 2002, the total value of ethical consumption in the UK was £19.9bn. Within this figure the EPI recorded sales of ethically marketed goods and services of £6.9bn, representing a 13 per cent increase on 2001. The UK economy grew by just 1.7 per cent last year.
In order to analyse the intent behind consumer actions, the Bank invited 400 shoppers to join an ethical panel, whereby their purchasing habits could be scrutinised over the course of a year. This new in-depth research has enabled a deeper analysis of people's motivations, and has found that many consumers are driven by ethical concerns. It has revealed a further £5.6bn of "ethical invisibles" is being spent in line with consumers' values and principles. These "invisible" activities include big brand boycotts and activities such as shopping locally. Many people shop locally for convenience, but for others the overriding consideration is to buy from local stores in order to support their community.
The report found that there are some ethical products that are now close to being the product of consumer choice in their respective sectors. In particular energy efficient household appliances now account for 41 per cent market share and free range eggs account for 40 per cent of retail egg sales.
The total value of ethical banking has continued to increase to £3.9bn, a rise of 16 per cent, whilst the value of ethical investments fell back to £3.5bn, a contraction of 8 per cent against a market decline of 17 per cent.
Despite strong growth in many sectors, the total market share for ethical goods and services is still less than 2 per cent. For example, whilst animal testing of cosmetics in the UK may be banned and more than eight out of ten consumers oppose it, sales of cosmetic products which comply with the Humane Cosmetics Standard have yet to achieve 2 per cent market share.
Download the Ethical Consumerism Report 2003 (PDF - 0.1Mb)
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