Amid rampant inflation, there’s one place where US consumers are acutely feeling rising prices—their grocery bills. And the sticker shock is rattling customer loyalty.
For the industry as a whole, customer satisfaction with grocery trips remained steady from the second and third quarters of 2021 to the first quarter of 2022, according to recent data from Bain’s NPS Prism® benchmarking platform. However, among grocers known for low prices, such as Aldi, there’s been a significant increase in Net Promoter ScoreSM—the measurement of a customer’s likelihood to recommend a store or brand (see Figure 1). Stores known for lower prices have seen boosts in trip satisfaction, with average Net Promoter Score increases of 2 points. In contrast, scores of grocers known for higher prices have decreased an average of 2 points over the same time period, falling below the market average.
In tougher macroeconomic environments, price and perceived value become even more important to customers, leading many to cut back their shopping at grocers they perceive to be more premium. On average, grocers known for lower prices have gained 1.3 points in share of wallet since Q2 2021 (see Figure 2). Meanwhile, high-price grocers have lost 1 point of share of wallet.
How can grocers contend with the high-inflation environment? Five steps can help them keep customers happy, even as prices rise.
- Invest selectively in the SKUs and categories that affect customer price perception the most.
- Use promotions, coupons, and loyalty programs to help customers feel like they are getting a great deal.
- Bring pricing, sales, and promotional messages front and center for customers.
- Consider investments beyond pricing, such as private label products, to improve overall pricing architecture.
- Manage vendor and other cost-based relationships actively.