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Tough times make more disloyal shoppers

By Rick Pendrous , 31-Oct-2012
Last updated on 05-Nov-2012 at 10:49 GMT2012-11-05T10:49:58Z

Shopper disloyalty has soared during the recession as customers become more "professional" and seek out promotions and cheaper offers elsewhere, manufacturers and retailers have reported.

Morrisons' chief commercial director Richard Hodgson told delegates at last month's IGD convention that shopper behaviours were "challenging" and retaining their loyalty was difficult in the current economic climate. This trend had increased with the rising use of price comparison web sites, delegates were informed.

"If we put classic brands on promotion, we see a dramatic shift in allegiance," said Hodgson. "30% of our customers admit to changing their supermarket of choice if there are better deals elsewhere and 40% shop at at least three."

Hodgson said the fault lay partly with supermarkets themselves, which were more interested in competing with each other than serving the customer. "To create loyalty, we must change the way customers think and act," he said.

IGD chief executive Joanne Denney-Finch argued that retailers were damaging the sector by the overuse of promotions. "Everyone loves a bargain, but no-one wants to be blinded by a blizzard of promotions, overloading us with information."

She called for more consistent unit pricing within each category to help consumers compare prices.

Heinz UK and Ireland president Matt Hill said: “The percentage of volume on deal in grocery has risen from 28% to more than 34% in the past few years, with some brands now selling over 85% on deal.” However, he reported that Heinz had reduced its promotional spend over time and instead focused on innovation to retain consumer interest. Heinz had also doubled its marketing spend over the past few years, he added.