Ethical concerns in retailing can be presented using a stakeholder framework.
Stakeholder theory can take different forms (Donaldson and Preston, 1995), and here a descriptive approach is adopted initially, merely as a useful way of represent- ing the plethora of ethical concerns that surround modern retailing.
Figure 1 portrays the stakeholders, who modern retailers impact on and/or are impacted by, although in reality, interactions between and across groups are more complex than the diagram suggests. While retailers’ interactions with each of these groups generate ethical concerns, it is neither practical nor necessary to explore all these interactions in equal depth. Initially, focus is put on key groups: customers, employees, suppliers and the wider community.
RETAILING
CUSTOMERS
EMPLOYEES
GOVERNMENT OWNERS
FINANCIAL
SERVICE PROVIDERS COMPETITORS SUPPLIERS
ACTIVISTS
COMMUNITY
LANDLORDS
MANAGERS
Fig. 1 Stakeholders in retailing
184 P. Whysall
Customers
A fundamental ethical issue remains, whether or not a deal is fair. A power imbal- ance between individual consumers and increasingly large retail corporations has been identified, especially regarding disadvantaged consumers (Alwitt, 1995). Deals may be unfair in various respects: price, merchandise quality, fitness for described purpose, conditions attaching to sales, after-sales support, misrepresentation, and so forth. A particular concern is that retailers might unfairly use their greater mar- ketplace power. This might manifest itself variously, but most obviously through predatory pricing (Compeau et al., 1994), and notably by apparent exploitation of vulnerable groups (Graddy and Robertson, 1999). Incentives such as competitions and special offers may also raise ethical questions (Whysall, 2000B). Fundamental is what constitutes a fair price and how that is determined (Michel, 1999). Beyond price, retail transactions increasingly involve exchanges of personal information, raising privacy concerns (Bosworth, 2005).
Fairness is also an obligation on consumers. Consumerism brought consumers’
responsibilities alongside enhanced rights (Davis, 1979). Consumers should follow product instructions, only make justifiable complaints, initially using appropriate channels, pay as agreed, comply with contracts and point out errors even when these are beneficial. However, there is also a view that shifts towards consumer sovereignty can go too far (Sorell, 1994), with growing concerns for fraudulent shopping practices (Schmidt et al., 1999).
Vulnerable groups like compulsive shoppers need particular attention (Shoham and Brenˇciˇc, 2003), while excluding “undesirable” groups from retailing is also questionable (D’Rozario and Williams, 2005). Attention has focused on “disad- vantaged” consumers (Ringold, 2005; Williams and Hubbard, 2001). Specifically, the elderly (Moschis et al., 1997), children and adolescents (Austin and Reed, 1999; John, 1999), the disabled (Kaufman-Scarborough, 1999), and the less mobile (Bromley and Thomas, 1993) have been seen as vulnerable.
Large stores generate complex trading impacts (BDP Planning/Oxirm, 1992).
Bell et al. (1997) identified across Europe “captured consumers” using fewer, larger stores and having limited knowledge of other stores, suggesting markets may be increasingly less competitive. The spectre of local monopolies has pro- voked debate (Poole et al., 2002). As affluent shoppers travel further for cheaper goods, poorer and less mobile consumers may face less choice and/or higher prices.
Davidson (1995) suggested retailers had obligations not to leave declining neigh- bourhoods for more profitable locations. The food deserts issue – whereby re- tail change leaves areas lacking basic food shopping provision – has generated controversy recently. Food deserts have been identified in diverse research loca- tions (Blanchard and Lyson, 2006; Rex and Blair, 2003). For Wrigley, (2002) a food desert is “a metaphor for the complex nexus of linkages between increas- ing health inequalities, retail-development induced differential access to food retail provision, compromised diets, undernutrition and social exclusion”. Others ques- tion the existence of food deserts per se (Cummins and McIntyre, 2002; Guy, 2002).
Values in the Marketplace 185 It seems agreed that disadvantaged consumers have suffered a worsening of shopping options in the wake of retail change (Carley et al., 2001), although dis- advantaged consumers show resourcefulness in coping with the problems that arise (Piacentini et al., 2001; Williams and Hubbard, 2001). Increasing dependence by disadvantaged consumers on smaller shops links to concerns over diet and health.
Caraher et al. (1998) saw this dependence as a barrier to accessing healthy foods, but links from local availability of healthy foods to health issues are complex (Cummins and MacIntyre, 2006).
Suppliers
Marketplace power has shifted from manufacturers to retailers, implying that suppli- ers of goods have become less powerful compared to their retail clients. This raises threats of the exploitation of retailer power. Relationships between British farmers and supermarkets have become strained (National Farmers’ Union, 2006A, B), and similar concerns are also heard in other retail sectors. A controversial aspect of retailer-supplier relationships is “slotting fees”, whereby suppliers pay retailers to get their products onto retailers” shelves and/or for advantageous positioning on those shelves (Aalberts and Jennings, 1999; Dickinson, 2002). That issue becomes more controversial with products such as alcohol (Gundlach and Bloom, 1998).
Sales of counterfeit products also raise concerns (Bloch et al., 1993; Hilton, Choi and Chen, 2004), as do so-called product look-alikes that imitate leading brands (Burt and Davis, 1999; Davies, 1998).
Global impacts of large retailers manifest in various concerns, including sourc- ing from developing economies. Blythman (2005) describes a Kenyan farmer who became increasingly dependent on increasingly demanding supermarket customers, yet could not exit the relationship without potentially disastrous consequences for employees and the local community. Seager (2006) reported that Starbucks had blocked Ethiopian farmers’ attempts to copyright their best-selling coffee beans, thus denying them secure income. A response to alleged abuses of producers in the developing world is the Fair Trade movement (Nicholls, 2002; Strong, 1997).
A particularly prominent concern is “sweatshop” production (Collins, 2003;
Khoury, 1998). Some see sweatshops as a necessary evil, generating growth in developing economies (Maitland, 1997), but more commonly, such activities are criticised (Arnold and Bowie, 2003; Arnold and Hartman, 2003). Responses include campaigns and boycotts against sweatshops (Johns and Vural, 2000; Smith, 1990), voluntary codes to regulate production conditions (Emmelhainz and Adams, 1999), and the introduction of “no sweat” labels (Dickson, 2001).
While retailers’ increased power makes them seem the more likely ethical vil- lains in relationships with suppliers, there are examples of producers seeking to protect their privileged position in the marketplace, as with perfume producers lim- iting outlets to maintain high prices (Whysall, 1995). Initiatives, such as “greening”
supply chains raise issues about the morality of using retailer power for benefi- cial outcomes.
186 P. Whysall
Employees
Employee relations are crucial in service industries like retailing. Retailing’s job creation potential has attracted attention in recent years, but while retail employment creation is generally welcomed, concerns remain that resulting jobs are relatively low-paid and often part-time (McQuaid et al., 2005). Unsociable working hours typify retailing, especially with liberalised trading (Kirby, 1992). Retailers may have used discriminatory practices (Broadbridge, 1995, 1996). Wal-Mart faced a class action on behalf of at least half a million women alleging sexism throughout the company over a prolonged period (Waldmeir, 2005) and was accused of knowingly employing illegal immigrants across 21 American states (Buckley, 2004). Thus, while retail employment creation is generally welcomed, it does not come without problems.
Retail work can be stressful (Broadbridge, 1999; Donnelly and Etzel, 1977). Ev- idence of dangerous working conditions in retailing also exists (Peek-Asa et al., 1999). There are also documented cases of threats to individual privacy in retail workplaces (Hartman, 2001). However, employees’ own behaviour in the workplace can also raise ethical concerns, as with employee theft (Anderton and Kiely, 1988;
Oliphant and Oliphant, 2001) and “service sabotage” (Harris and Ogbonna, 2002).
Community Interests
Local opposition from residents and established traders to retail developments is not uncommon (Whysall, 1999), although there can also be a trade-off whereby people want a new store close enough for them to access, yet not so close as to impact on their lifestyle or property values. Nonetheless, retailing has become an important element of economic regeneration strategies (Dixon, 2005).
Recognising the social functions of retailing, there is a case for treating certain retail activities as essential local services, leading to schemes to protect Britain’s declining network of small post offices, which also act as welfare/benefits outlets (Office of the Deputy Prime Minister, 2003). Similar arguments focus on community pharmacies (Schmidt and Pioch, 2004).
Baron et al. (2001) saw the independent retailer as a community focus. However Bell et al. (1997) suggested that “substantial proportions of the population” across Europe had been disadvantaged by the “retail revolution”, arguing paradoxically that low-income groups who most need supermarket chains’ low prices are often least able to access them. It has been asserted that modern marketing exchanges are biased in favour of the marketer, with the poor in the USA paying more for goods and services while receiving less choice or variety of goods (Alwitt, 1995; Kaufman et al., 1994).
Retailers can also provide community support. British supermarkets have pro- moted projects whereby customers’ purchases fund equipment for schools, although these have been challenged in terms of the actual returns to schools compared to
Values in the Marketplace 187 the public relations gains for retailers (Garner, 2001). There can also be a heritage dimension, with village shops, for example, integral to rural infrastructure and re- tailers often being preferred tenants for cherished buildings of architectural or his- toric merit that have lost their original functions (e.g. London’s Covent Garden, San Francisco’s Fisherman’s Wharf and Ghirardelli Square, Boston’s Quincy Market).
Activist groups represent a particular subset of community interests, although their status as stakeholders is problematic; often they contribute little to organisa- tions, yet can have serious negative impacts on them. Activist pressures on organi- sations vary in level and form (Smith, 1990). Many topics generate protest: animal rights issues in clothing and cosmetics, third world sourcing issues, sweatshop labour, polluting activities, inappropriate exports to developing societies, unhealthy foods and various political campaigns.
Ethical concerns exist around all the relationships identified in Fig. 1 (Whysall, 1995, 2000), but to explore each further might be a distraction from the objective of conceptualising ethical retailing. The key point is that all stakeholder-retailer relationships can exhibit ethical dimensions. It is also important to note that the discussions have shifted from relatively simplistic “value for money” considerations to embrace aspects of marketplace power, the importance of information and global impacts of trading relationships, all increasingly important dimensions of modern retailing.
A shift from descriptive to normative stakeholder theory (Donaldson and Preston, 1995), whereby it is argued that all stakeholders have a fundamental right to be considered in retailers’ decision-making is contentious. Stakeholder models have widespread support, but also attract strong criticism (Sternberg, 1997). The stake- holder model per se does not have an ethical foundation, although Kantian argu- ments can be attached to stakeholder theory (Evan and Freeman, 1993). Even then, how to resolve conflicting stakeholder claims is likely to remain problematic. In summary, then, we can conceptualise the ethics of retailing as a complex set of stake- holder relationships, but that does not necessarily offer a framework for resolving ethical dilemmas. It does, however, add depth and dimensionality beyond the simple dyadic model of most ethical discourses on retail transactions, highlighting issues such as power imbalances, information and global impact.