Shoppers Compare Grocery Prices to Choose Merchants

As inflation chips away at shopper loyalty, grocers must become more aware of competitors’ pricing.

In an interview with PYMNTS, Sean Turner, co-founder and CTO at retail technology company Swiftly, noted that consumers have become very deliberate about how they choose where they will purchase their groceries.

“Shoppers are clipping more coupons,” Turner said, noting consumers are more focused on planning their grocery shopping trips. “They’re really trying to compare prices across different stores. They might go to the Walmart website or app and see what the product costs there, then launch one of our retailer’s apps like Save Mart’s app or the 99 Cents Only app and search for the same product there to see where it’s cheapest or where they can get a coupon or a discount.”

PYMNTS research finds that many grocery shoppers are motivated by low prices. For the latest edition of the Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” PYMNTS surveyed more than 2,100 United States consumers in February to get a clearer sense of how inflation has been affecting their shopping habits and relationships with retailers. The results revealed that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.

Amid economic pressures, major food brands have been maintaining that consumers are remaining loyal, but retailers are telling a different story, noting that shoppers are trading down to their private-label offerings. Turner notes that, in a sense, both stories are true — consumers will stick with their go-to brands in key categories but trade down for the rest.

“Typically, consumers will have a few products that are very important to them, where they’re not going to trade down,” Turner said. “But maybe the brand of bread that they’re buying, or perhaps it’s the brand of detergent — where they’ve got other opportunities to economize, consumers will definitely do so.”

In fact, PYMNTS research from that same Consumer Inflation Sentiment survey reveals that half of consumers say finding better deals has become a much more important, if not the most important, factor when choosing where to buy retail or grocery items. On the other hand, approximately one-fifth consider themselves loyal customers of specific brands and merchants in spite of today’s cost pressures, while a third of shoppers seek a balance between loyalty and deal seeking.

In this period of inflation, Turner noted that shoppers across income brackets and spending styles are looking at the very least, to understand the pricing at the grocery store. He noted that hidden fees or unstated markups on digital channels could alienate shoppers, while retailers being upfront about the actions they are taking to manage inflation can go a long way toward building trust.

“Even though you might not be a price-sensitive retailer or one that has focused on price, that communication and transparency with the customer is super important, because that is something that customers are looking at now,” Turner said. “Ultimately, as long as you are being upfront about the expectations you set with the customer, and then delivering against those expectations, I think that’s going to win consumer loyalty in the long run.”