Supermarket loyalty non-existent

BY Australian Retailers Association
22 September 2015

Aldi StoreTo paraphrase the old saying, no supermarket is an island, and even if it was, most of Australia’s 14.2 million grocery buyers would prefer to island hop than stick to the one place, according to latest research into supermarket loyalty by Roy Morgan.

The latest findings reveal that more than three quarters, or 77 per cent of the nation’s grocery shoppers visit at least two different supermarkets in an average four weeks.

Of the four major supermarkets – Woolworths/Safeway, Coles, IGA and Aldi – IGA has the most loyal customers. In any given four week period, 30 percent of people who mainly shop at IGA only shop at IGA.

Grocery buyers who mainly shop at Woolworths or Safeway are the second most likely at 25 percent to stick with their number one, marginally ahead of Coles shoppers, 24 percent. Despite its increasing overall market share, Aldi has a much lower proportion (seven percent) of exclusive shoppers.

When asked how many major supermarkets they shopped at over the last four weeks, 37 percent of Aussie grocery buyers reported shopping at two, 28 percent said three, and seven percent said they shopped at all four.

This pattern is relatively consistent among Woolworths and Safeway shoppers, Coles shoppers and IGA shoppers, for whom visiting two supermarkets is the most common scenario.

When it comes to Aldi, however, the greatest proportion (47 per cent) of its shoppers visit three supermarkets in an average four week period. Furthermore, people who say they mainly shop at Aldi are more likely to visit all four major supermarkets in that time than shop at Aldi alone.

Andrew Price, GM consumer products at Roy Morgan Research, says the data confirms that Australia’s supermarket scene is incredibly competitive.

"These latest findings throw another challenge into the mix. While most grocery buyers have a supermarket they mainly shop at, a relatively low proportion of them shop exclusively at that supermarket. They do not seem to have any great sense of loyalty to their main chain," said Mr Price.

“Woolworths, Safeway and Coles customers are quite similar in their shopping habits - they are more likely to shop at two or even three of the main chains in an average four weeks than return to their primary supermarket every time.

“These results suggest that customer loyalty programs such as FlyBuys, held by more than half of Coles shoppers, and Everyday Rewards, held by more than 60 percent of Woolworths and Safeway customers, are not achieving the desired result.

“The fact that so few Aldi customers shop exclusively at Aldi is not so surprising. While the German chain offers low prices and a popular homebrand range, it does not have such a huge variety of products as the other major supermarkets. As a result, it’s almost inevitable that Aldi shoppers will need to visit other chains during the month to complete their grocery shop,” Mr Price said.

RM supermarkets

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Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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