Ed Davey - Empowering the consumer
My mum would walk to the other side of town if she knew she would save a few pennies on even one item - and I’d have gone with her. And on a big shop, she’d always check off the goods against the receipt when we got home.
Forty years later, I’m still up for a good deal, but as Consumer Minister I know the need to help be more easily informed of choices and options.
Shoppers now face a greater set of choices than ever and anyone can struggle sometimes to make informed decisions. The key is to be able to understand the choices confronting them, especially in a retail environment that has changed considerably with the rapid rise of the internet.
We are working on developing a strategy for empowering consumers, which we will publish in the spring. This will set out our proposals and include some pilot projects that harness advances in technology and digital media to test out our ideas.
To help with the process, we are working with consumers, communities and businesses to explore ideas. My Department has met with businesses, charities, and other public bodies, including Consumer Focus, to look at the concept of collective purchasing. This is where people come together and negotiate collectively with a business to supply them goods and services at the best price.
The idea is not new; there is already some great work being done in this area. For example, a group of residents in a deprived part of Maidstone have banded together to bulk buy groceries for the local community at discount prices. The R- Shop was set up in response to one mother who had extreme difficulty managing the weekly shop with a small child and no car. The group, supported by the Social Innovation Lab for Kent, now collects shopping lists from residents, purchases the goods from a local cash and carry store at cheap rates, and then distributes from its own base - a converted, disused primary school kitchen.
As an economist, the principle behind collective purchasing is very clear: it’s an ‘economy of scale’ - the more you sell, the cheaper you can sell it. Companies competing for the custom of better informed shoppers will in turn be more innovative, create better products and provide more value for money.
But it’s not just about saving consumers money. It can also lead to a greater sense of community cohesion, through groups of people coming together to purchase goods of common interest.
Clearly the key to collective purchasing is finding enough people who share a similar desire or need, which is why a number of current models are focused on particular industries or localities. But I am keen to see how the Government can work with other groups to enable collective purchasing to flourish and help all members of our communities, particularly the vulnerable.
As well as working with our stakeholders, I would really like to hear your opinions about this idea, which you can leave below. I’m sure there is a wealth of experience and knowledge out there. So tell me what you think. It’s time for a change and we want to help consumers make that change.