Price still rules for grocery shopper

Posted by Isobel Drake on 19th August 2009

Gone are the days when shoppers selected retailers based on convenience, merchandising, promotions and affordability, new research from America suggests, as shopper loyalty becomes a much more complex subject.

When mortgage and financial markets weakened, and energy and food prices spiked, shoppers around the world flocked to cheaper retail outlets across almost every retail category. In Australia, this saw some of the smaller competitors in upmarket grocery space face difficulty as well as a few organic retailers – such as Macro Wholefoods; while Aldi was seen as one of the major beneficiaries. It was a similar story in the UK and US, where consumers flocked to ‘supercenters’ and discount grocers.

However, with a levelling out of the economy, consumers are once again reassessing their shopping attitudes, behaviours and strategies, the latest IRI Times & Trends Report, “Channel Migration: The Blurring of Shopper Loyalty,” discovered.

The research suggested that consumers are now more willing to shop at multiple stores due to a fall in petrol prices. Last year’s surge in prices saw many try to limit their grocery trips, but lower prices have encouraged more shopping around. Indeed, consumers are also making more frequent visits to the grocer/supermarket, with the rate of basket growth moderating.

“Even though shoppers are assessing their needs more rationally and are visiting a wide range of channels, they still view their purchases largely through price,” IRI Consulting & Innovation President, Thom Blischok, added. “This mindset is not lost on CPG marketers. In fact, several grocery retailers are focusing on an everyday low price format.”

“Because increases in hiring typically trail recovery after a recession, IRI forecasts that price will continue to be a principle driver in shoppers’ decision-making process after the recession ends.”