A new nationwide study of consumers indicates that young shoppers increasingly demonstrate loyalty to the stores they use for household grocery purchases.
The “The Rise of Loyal Shoppers” study, produced by the Private Label Manufacturers Association (PLMA), New York, focused on 1,059 men and women ages 25-45, a segment that makes up more than one-third of the U.S. adult population. This age group is important to retailers because their spending on household grocery products is considered to be the highest among all age groups.
“This latest study indicates that many long-held assumptions–shaped by years of market dominance by the Baby Boom generation–are no longer true,” says Brian Sharoff, president of PLMA. “Buffeted by a severe recession, a revolution in communications, media and advertising and a retail landscape that bears little resemblance to what existed less than a decade ago, today’s consumer is not the same shopper we used to know.”
According to the PLMA study:
These consumers shop often, but a majority does their regular grocery shopping at only two stores. The rate of shopping trips is high—more than eight in 10 of consumers ages 25-45 shop at least weekly. But, patronizing just two stores for their regular household grocery needs is by far their most popular shopping regimen and has been increasing as a habit overall during the past decade. This runs counter to the conventional wisdom that consumers are increasingly shopping across a growing number of stores for different products.
Consumers shop around, but are in fact very loyal to their favorite stores. Some observers contend that every time a new or revamped retail format debuts, consumers forsake their favorite store and rush to the new shop on the block. This survey casts doubt on that scenario. Rather, it reveals that these younger consumers have been loyal to their favorite stores for years. In fact, six in 10 consumers have regularly shopped at their grocery store as well as their mass merchandiser for more than five years. Half have shopped at their drug store for that long.
Consumers buy store brands on a continuous basis. About half of the respondents buy store brands “always/almost always/frequently” in their supermarkets, drug stores and mass merchandisers. This is a dramatic increase in the top rates of purchase when compared to past PLMA studies.
Store brands may be the retailer’s best friend. Consumers in increasing numbers are trying store brands for the first time in product categories where they had previously only bought a national brand. Moreover, in overwhelming numbers they report the trial produced a satisfactory experience. In one of the most significant findings in the survey, more than 49% of respondents recently choose a store brand for the first time instead of a favorite national brand in a particular category. When later asked how they compare the store brand with their previous choice of a national brand, 28% reported “very favorably” and another 62% said “favorably.”
“The baton has passed to a new generation of consumers,” adds Sharoff. “There has been a major shift of purchasing power in the marketplace. After decades of dominance by boomers, a new generation of Americans–those ages 25-45–has taken over as the heaviest purchasers of consumables. What’s more, they behave differently from other generations when they shop.”