Despite aggressive discounting and loyalty scheme pricing by traditional supermarkets, new research suggests that discounter switching remains rife.
The survey by Pricer found that 65% of consumers have switched some or all of their food shop to Aldi or Lidl, a rise of +4 percentage points year-on-year. Over half (51%) said they had switched some of their food spend to the discounters, while 13% said they now do their entire food shop with either Lidl or Aldi.
Younger demographics of shoppers were the most likely to switch to discount supermarkets, rising to 79% of Millennials, widely considered to be the generation most impacted by the cost-of-living crisis, and 78% of Gen Z. Regionally, Londoners were the most likely to change their allegiance away from the traditional grocers and swap to Aldi or Lidl (81%), compared to 60% in the Midlands and 67% in the North.
In spite of falling food price inflation, consumers are still highly price and promotion sensitive, with 81% of consumers polled by Pricer saying they remain cost-conscious and over a third (35%) saying they plan to remain economical with their food spend, even if their disposable income felt less squeezed.
Meanwhile, Pricer’s poll showed that 42% of consumers are choosing to shop in a greater number of supermarkets compared to a year ago, with Gen Z (66%) and Millennials (64%) again the most likely demographics to display more fickle food shopping behaviours.
Price (52%) proved the top reason for those opting to shop across more supermarkets, while the range of choice (40%) and quality (34%) also featured prominently in consumers’ motivations for shopping around. A third (33%) said the choice of own-label or value ranges impacted their decision to shop across more supermarket chains. Meanwhile, 30% cited better ranges of vegetarian or vegan produce, and 18% said access to higher welfare products was a key factor.
Peter Ward, UK country manager for Pricer, commented: “Overwhelmingly, our research shows a growing diffraction in supermarket loyalty among consumers. Largely driven by pricing and cost-sensitivity, this plays naturally into the hands of the discounters, which is why they’ve continued a steep growth trajectory, with Aldi already overtaking Asda as the UK’s third largest supermarket earlier this year.”
“However, while price remains at the fore, choice (both across branded and non-branded goods), quality and access to higher welfare produce are all also playing key roles in consumers’ motivations to shop around for their groceries, which gives traditional supermarkets another battleground on which to fight for share of wallet, rather than just a race to the bottom.”
NAM Implications:
- This trend is similar to the move from brands to own-label…
- …in a search for lower-cost alternatives…
- …and probably finding (to their surprise) that the quality difference was less than expected.
- Even more so with the discounter alternative to supermarkets…
- …when the reduced assortment was not as burdensome…
- …in fact a relief in terms of the confusion of too much choice.
- The dilemma in common will be the difficulty in winning back these ‘satisfied’ regular users of own-label and discounters.
