June 22, 2009 / 7:04 AM / 9 years ago

Recession takes bite out of brand loyalty: study

LOS ANGELES (Reuters) - The U.S. recession is taking a bite out of national brand loyalty in products ranging from Advil pain reliever and Green Giant frozen vegetables to Jif peanut butter, according to a study released on Monday.

A customer shops in the Pharmacy aisle at Sam's Club, a division of Wal-Mart Stores in Bentonville, Arkansas June 4, 2009. REUTERS/Jessica Rinaldi

Just four out of 10 brands held on to at least half of their highly loyal customers from 2007 to 2008, according to the study from Catalina Marketing Corp’s CHKHDC.UL Pointer Media Network, which gathers purchasing data at 23,000 stores nationwide.

Retaining customers is a challenge for food sellers in any economy and keeping them in a weak economy can be even more difficult.

Forty-eight percent of highly loyal consumers stayed that way during the study period, while 19 percent reduced their loyalty and 33 percent completely defected to another brand in the same category in 2008, the research showed.

The study defined highly-loyal consumers as individuals who made 70 percent of more of their purchases with a single brand in a given product category.

The study authors said Coca-Cola Classic (KO.N) is one of the nation’s most successful brands. Even so, 25 percent of Classic Coke buyers were less loyal during the study period.

That compares with Procter & Gamble Co’s (PG.N) Crest toothpaste, which saw almost 59 percent of its highly loyal buyers become less committed.

This time around, retailers such as Kroger Co (KR.N), Safeway Inc SWY.N and Wal-Mart Stores Inc (WMT.N) are aggressively expanding their own private labels. Those products often cost less than national brands and appeal to consumers looking to stretch every dollar.

The United States officially slid into recession in December 2007, but consumer spending was showing signs of weakening prior to the official start of the downturn.

When asked if the loyalty decline could intensify from 2008 to 2009, Catalina Marketing Vice President Todd Morris said: “It likely could.”


The Pointer study was based on an analysis of the purchasing behavior of more than 32 million shoppers in 2007 and 2008 across 685 leading brands, Pointer said.

Catalina Marketing has a system that selects and prints coupons at checkout based on what a shopper buys. Full study results are available here: here

Other data from the study showed that Wyeth’s WYE.N Advil suffered a 7 percent drop in high loyals from 2007 to 2008. On the flip side, the number of people who were highly loyal to General Mills Inc’s (GIS.N) Cheerios brand rose 6 percent.

J.M. Smucker Co’s (SJM.N) Jif peanut butter lost 7 percent of its highly loyal customers from 2007 to 2008, while General Mills’ Green Giant frozen boxed vegetables lost 9 percent.

Reporting by Lisa Baertlein; editing by Andre Grenon

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