Grocery shoppers loyalty on the wane

Posted by Daniel Palmer on 14th July 2008

Consumers are becoming increasingly disloyal as they look for ways to decrease their shopping bill in the wake of rising fuel, food and finance costs.

In all, 22.1 per cent of British consumers were willing to shift from retailer to retailer due to their dissatisfaction with their current store. This data represented greater disloyalty than ever before, according to Verdict Research.

Supermarket shoppers were found to be the least loyal, with 32.4 per cent indicating they would be more than happy to switch retailers. The figure represented a 2.3 per cent jump on last year and is indicative of the trend toward greater flexibility by consumers. Such findings are particularly welcomed by discount retailers, whose low price strategy lures in the disgruntled shopper searching for a place to reduce their costs.

The fact that the results follow an increase in the number of loyalty programs highlights the current economic concerns faced by many consumers. “Food is a particularly fierce battleground,” James Flower, Senior Consultant at Verdict Research, reported. “Such a low level of loyalty comes despite the fact the major grocers have engaged in a variety of initiatives from price cutting to loyalty cards to retain customers.”

Discounting has become particularly prevalent in UK supermarkets in recent months as retailers look to entice consumers to their store with promises of cheap family meals. An example of which was Asda’s recent sale of a pack of eight sausages, which valued the sausages at 2p each and was the basis of their claim that a family of four could serve up a meal of bangers, mash and carrot for under £1.6o.

The findings by Verdict Research indicate that keeping consumers has become more difficult than ever before at a time when retailers desperately need to retain their customer base to cope with the deteriorating economic climate. Understanding the increasingly discerning consumer will be pivotal the the success of retailers in coming years.

The report, while not great news for retailers, does convey the potential for retailers to take consumers away from their competitors and the 91 per cent loyalty to retailer ‘John Lewis’ implies that retention rates can be kept high with the right value offering.