The Ideas Factory is a chance for you to pitch your own idea of what should be in the next Liberal Democrat manifesto. The proposal here is not the policy of the Social Liberal Forum. We will however be passing it – and the response it generates – onto the Manifesto Working Group.
James Graham: work with the industry to develop incentives to dramatically switch from supermarket use to home delivery.
A couple of disclaimers to start with: this isn’t an attack on supermarkets. Nor is it a fully fleshed out policy agenda. Ideally it could be achieved with minimal state intervention, but government may be able to play a role in terms of creating incentives to make it easier for industry to adapt.
Home delivery is generally seen as a middle class indulgence. And in its present form, frankly, it is. But a significant shift towards home delivery would have a whole host of positive outcomes:
a) It would reduce the carbon footprint of grocery shopping.
b) It could be combined with waste collection and thus lead to waste reduction: if the industry had to collect food packaging and waste, it would have an incentive to keep it to a minimum; if food went directly from warehouse to home, there would be less need for packaging. Savings could be passed onto consumers in the form of reduced municipal taxation.
c) If business had a profit motive to do so, it could help tackle the digital divide. Just as my mobile phone is subsidised by my phone company who want my monthly payments, so potentially could supermarkets have an incentive to discount home computers to make it easier for people to shop online.
d) Improved quality of life; less slogging around around a supermarket on a Saturday afternoon.
Nonetheless, there are significant barriers to this shift happening by itself. Supermarket chains with existing stores have a short term profit motive in keeping their stores profitable, and thus filling them with customers (in the longer term, a significant shift from shop to home delivery would inevitably lead to shop closures, although these would be replaced by warehouses). Most people will want their goods to arrive at around the same time – weekends and evenings and so there is a problem with scaling up. And then there is the simple habit of people used to a certain way of shopping.
In other areas however, big shifts are happening. The music and video industry has transformed over the past decade from one largely based on the high street to one based online. Amazon now dominates the book industry (the Amazon model is an interesting one: imagine a system where local farmers could use tesco.com to sell their own produce, making a daily delivery to the local Tesco warehouse to fulfill the orders, just as Amazon allows third parties to sell books via its Marketplace). Why shouldn’t we look to make a similar shift in grocery sales? After all, it wasn’t that long ago that people took it for granted that milk and other dairy products were delivered door to door; the local milkman wasn’t abandoned because it was a bad system of distribution but because they couldn’t compete on price.
There will always be a place for buying food in person, but that side of things will always be done better by specialist retailers such as greengrocers and butchers (Who knows? Maybe freeing people from the weekly trudge to an out of town supermarket will encourage them to rediscover their local high street?) What supermarkets do best is distribute food in large quantities. This policy would preserve that while attempting to minimise the more negative aspects of supermarket retail.
Note: this idea came out of a brainstorming session at the Liberal Democrats’ policy conference in January 2009. My thanks to the other members of that group who helped develop the idea.
Susan Gaszczak: The interesting point here is linking home delivery to waste reduction. Over the last 25 years we have moved from a culture of going to the local shop to shopping in large warehouses, and that in itself has caused the increase in waste. 25 years ago, when shopping, you would go to the greengrocer, butcher and fishmonger and buy the quantity of food you required and it would be wrapped in either a plastic or paper bag.
The situation now is that supermarkets dictate the quantity of food you buy by wrapping it together. If we could persuade supermarkets to move away from standardised sizes and back to the counter model, where you could take your own reusable containers in and buy the quantity you require would in itself reduce waste.
This solution would not reduce the food miles, which are astronomical, but would reduce the amount of packaging. Shopping online is great when you know exactly what you are going to eat and cook, but it does not allow you to try new foods. Many people who do an online shop still find themselves visiting the branch they have ordered from because of the things they have forgotten and this actually increases the number of food miles. If a solution can be found for this then your idea could work.
Richard Huzzey: This is a good aspiration, but I find it hard to see how you would coerce such activities. You could offer a VAT rebate for online shopping – but this would further the problems for small local bricks-and-mortar shops which already struggle against internet competition. I think this may be one of the cases where well-meaning tweaks to the tax system could have unpredictable effects down the line — a frequent problem, as Lib Dems know, with New Labour’s legislative diarrhoea.
One of the biggest problems is supermarket monopoly as a result of lack of market competition in the grocery sector. In this respect, supermarkets’ property portfolios are a huge asset – and one that a shift to land value tax would do much to address. Capitalism acts in the consumer interest when monopolies are restrained and competition is promoted — that’s wealth creation Lib Dems can believe in.
I’m afraid I want to know more about what ‘incentives’ would be. It’s interesting that market advantages in selling some items (books, DVDs) have helped make business like Amazon and Play.com thrive, but buying food is still something we generally prefer to do in person. I don’t plan meals and hence purchase ingredients very far ahead.
Just as I deny that free market lessons from selling bread and milk can be applied to health and education, so I’d beware thinking that the state can always pull levers and change consumer practices with ‘tweaks’ like this! Show me more detail, and maybe I’ll take your idea on a buy-one-get-one-free offer with LVT.