City & Corporate: Strong Primark sales despite expose

But the tables were turned in the financial markets on Tuesday, with
Primark announcing a 17 per cent increase in yearly profits and M&S
reporting a 44 per cent half-year profits slump on declining clothes
sales.

Geoff Lancaster, Primark's head of external affairs, agreed reputation
damage had not affected its trading performance, but insisted that it
continues to take ethical matters 'very seriously'. He said: 'We are
doing a lot of work and feel we were unfairly represented by
Panorama.'

M&S insisted its CSR programme feeds into the company's profitability
and that its Plan A drive is now cost-neutral. 'Climate change hasn't
slowed down just because the economy has. We know from feedback that
ethical issues remain very important to our customers and this survey
shows we are responding in a meaningful way,' said Flic Howard-Allen,
director of comms and CSR.

But senior agency PROs have been quick to use the fact that the clothing
retailer with the worst reputation on the high street is posting the
best results to show that CSR is not central to businesses success.

'I do not think CSR will have an impact in the current economic
environment,' said Fergus Wylie, Gavin Anderson executive chairman,
Europe. 'Ethical issues have a higher profile in good times.'

This flies in the face of another poll by fashion magazine Drapers
claiming that 44 per cent of Primark shoppers were likely to switch to
another chain after Panorama.

'There is a huge gap between what people say and what people buy,' said
Andrew Griffin, MD of Regester Larkin. 'The most important thing is
serving your customer well and ethical issues are only on the edge of
that equation.'

Wylie did concede that over the longer term consumers will become more
aware of CSR and its impact on buying power will become stronger.

Research this week from Business in the Community backed up this
positive impact, finding FTSE companies that actively managed and
measured CSR outperformed the FTSE 350 on total shareholder return by
between 3.3 per cent and 7.7 per cent in 2002-07.

HOW I SEE IT - Ash Coleman, EMEA MD, Ogilvy UK

Consumers have become more sensitised to the CSR of businesses over the
past decade. During a recession corporate reputation may affect
customers' purchasing behaviour less, but I do not think that once you
have sensitised a consumer they suddenly forget about it just because of
tough times.

During a boom time consumers have the luxury of worrying more about
broader issues, but in a downturn their primary concerns will be much
more close to them. It is no use having an environmental policy if you
can't demonstrate responsible employment and respect for local
communities when the recession bites.