Paper or Plastic?

by | Nov 19, 2012

We have all heard the question before. It has been around for years. Paper or plastic? Now things are beginning to change. Will there be a choice in the future? Will the customer allow the question to be asked? Will the retailer allow the question to be asked?

This is not an article about being green or justifying those decisions.  No, this is about the impact on the retail labor model regarding the answers to those questions.  Many customers and many retail companies are embracing the end of using plastic bags for a wealth of great reasons. What I ponder here is do the retailers take into effect the impact of the decision. It seems simple, replace one item (plastic bags) with another (paper bags or no bags or re-usable bags).

There are many decisions being made in retail today. Should a company keep self checkouts operating? Should a retailer employ a double coupon strategy? How often should price changes be made in a week and how many should be made at one time? Should the retailer pre-price merchandise at the distribution center and save tagging labor in-store? Should the number of deliveries be decreased per store per week? They are all good questions that will lead to changes to amount of labor that is used in the stores.

The “Paper or Plastic” question has an impact on labor, too.  Paper bags, plastic bags and cloth bags hold varying amounts of product. They also have various procedures to perform to set the bag up to hold the merchandise. They also vary as to the time it takes to move the full bag from the check stand to the customer’s shopping basket.

Let me illustrate my point.  I looked at some data from our database of retail industry labor standards and here is what I found:

  • It takes about one-third the time to move a plastic bag from the check stand to the shopping basket.
  • It takes about 14 percent more time to set up a paper bag versus a plastic bag for an order.
  • Due to item volume, setup, and transportation of the bag it takes about 46 percent more time to use a paper bag than a plastic bag for an order.
  • A re-usable cloth bag takes about the same time for a plastic bag, but the average volume per bag is different.

Something seemingly small like “Paper or Plastic” can have a significant impact on the amount of labor needed in-store. Swinging the ratio of paper to plastic via procedure can have a huge effect on the Labor Model. In a typical 50-store supermarket assuming that staff gets paid minimum wage, the decision may swing labor costs by $150,000 per year based on this one simple decision.

My point is not to lobby for or against any type of bag or equipment. The point is that there are real differences in the amount of labor needed per transaction based on the answer to the “Paper or Plastic” question. Something changes in retail policy and procedure every single day.

What about self-checkout? Instead on a one-to-many labor association, we would go back to a one-to-one association of labor cost to customer. No longer could a single self checkout clerk handle the four or six areas of customer processing. There would be a need again for a cashier per checkout. That changes the entire Labor Model for sure.

Regarding double couponing, has the Retailer thought through the added process steps needed to allow for the extra savings? Or, have steps been eliminated because of automated point of sale? Regardless of the procedure and execution, those tons of coupons being used today can have a big impact on the Labor Model.

Price changes are coming down the pike faster than ever. In many cases, gone are the once per week price change crews we used to employ. Now, the cost of fuel and the cost of food require constant changes in pricing. Even if you still have the same amount of changes per week, you still have the cost of setting up and breaking down the process of getting them done every time you do price changes.

So, every action has a reaction. Every decision has a cost associated with it.  Every process needs to be part of the Labor Model. All these years we thought the question was simple: “Paper or Plastic?” Maybe the question is larger than we think.

Never miss an update!

Sign up for our WFM Newsletter for all the latest trends, insights, and expertise from Axsium.


+1 (416) 849-5400

+1 (416) 849-5400

+61 (0) 3 9674 7312