Discount supermarkets can't be beat on price, but promotions can help keep customers
Sodexo Engage, specialists in employee and consumer engagement, has found that UK supermarkets are severely lacking in their promotional offering to customers.
In the latest Brand Loyalty Index by Sodexo Engage, which charts the 50 most loyal brands in the UK, supermarkets scored poorly for their promotional offering, with over half of respondents (52%) revealing that these stores do not offer any promotions to their customers such as free samples or instant win prizes.
Following the disappointing Christmas sales for a number of supermarkets, this unexplored area may help the premium stores compete with their discount counterparts. Sodexo’s Index also shows that discount stores are climbing the ranks in terms of customer loyalty, with Aldi listed as the third most popular supermarket and Lidl coming in fifth position. With Aldi and Lidl both scoring highly on value for money (81% and 80% respectively), premium supermarkets will struggle to beat these chains on cost alone. As discount stores increase in both customer loyalty and sales, the traditional supermarket needs to consider these promotional offerings in order to retain their market share.
Despite M&S Food retaining its top spot as most loyal supermarket, its position is far from secure. The Christmas trading results combined with low scores on value for money (42%) and availability (26%), suggest a possible downturn in the future. Waitrose also fared poorly, dropping from fifth position to ninth – the second least loyal supermarket in the UK with the Co-operative in last place.
“While the more premium stores such as M&S Food and Waitrose cannot compete on price, it doesn’t mean that they are doomed to be left behind by the discount behemoths of Aldi and Lidl. Across the board, supermarkets are lacking in their promotional offering to customers. Simple practices such as free samples and competitions are a rarity for consumers but stand out as a key differentiator in the market. It’s a huge opportunity that supermarkets are missing out on – not only to gain increase traffic to the store, but also improve overall loyalty to the franchise.”