Supermarkets failing to retain young families, new TCC research reveals

Four in 10 families with children under the age of 10 have switched their main supermarket of choice in the last year, a UK survey of more than 1,000 shoppers has revealed.

The research, commissioned by retail marketing company TCC, reveals that despite the availability of loyalty cards at all of the main supermarkets, many young families have switched to the discounters in search of better prices.

Overall, nearly a quarter (24%) of British shoppers switched supermarkets in the last year, a stark contrast to the shopper inertia that was evident in the UK before the recession.

David Lawrence, TCC’s director of planning and insight, said: “Before the recession shoppers merely selected the supermarket that was closest to them and rarely deviated from that choice. This led to retailer complacency and supermarkets taking customer loyalty for granted.”

The research reveals that while price will continue to be the main driver for switching supermarkets (42% cited this as the main reason), shoppers say that their choice of supermarket in future will be strongly influenced by those retailers who genuinely recognise and reward their loyalty.  Over half of all shoppers (55%) said they want more loyalty rewards than they currently receive, illustrating a clear loyalty gap in the benefits and perceived value of loyalty cards.

“The ubiquitous nature of loyalty cards and their questionable generosity means that they no longer offer any point of difference for retailers,” said Lawrence.“But our research indicates that there is still very much an appetite for loyalty rewards to enhance the shopping experience and build a stronger emotional bond between shoppers and their supermarkets. It may be true that ‘Big Data’ has enabled greater customisation of loyalty offers but there’s no evidence that this has improved the way shoppers feel about their supermarkets.

“Now that supermarkets are all offering various price match promises, they have levelled the playing field as far as price is concerned so they have to explore new ways of differentiating themselves to attract and retain shoppers.  Significantly, our survey reveals that the second most important factor for shoppers switching supermarkets in the future is being rewarded for their loyalty (cited by 36% of shoppers) so retailers need to review their loyalty strategy and look again at what truly motivates shoppers.”