Supermarket loyalty scheme pushes fail to stop rise in discounter switching, new Pricer research finds

Despite aggressive discounting and competitive ‘members only’ offers for loyalty programme customers, traditional supermarkets continue to lose market share to discounter rivals, Aldi and Lidl, according to the latest research by Pricer.

A survey of over 1,000 UK shoppers showed that discounter switching remains rife, with 65% now having switched some or all of their food shop to Aldi or Lidl, a rise of +4 percentage points year-on-year. 

51% had moved some of their food spend to the discounters, while 13% said they now do their entire food shop with either Lidl or Aldi.

Younger demographics of shoppers were the most likely to jump to discounter supermarkets, rising to 79% of Millennials, and 78% of Gen Z. Regionally, Londoners were the most likely to change their allegiance away from the traditional grocers and swap to Aldi or Lidl (81%), compared to 60% in the Midlands and 67% in the North.

In spite of falling food price inflation, consumers remain highly price- and promotions sensitive, with 81% of those polled by Pricer saying they remain cost conscious and 35% stating they plan to remain economical with their food spend, even if their disposable income felt less squeezed. 

In response, the traditional Big 4 supermarkets have focused their price matching efforts on offering larger discounts to loyalty programme members. 

However, last month Which? magazine’s price comparison report, which included supermarket loyalty scheme data for the first time, showed that despite Tesco Clubcard and Sainsbury’s Nectar card lowering the total basket price of a typical food shop, Aldi and Lidl both came out cheaper.

And, as well as competing on price, with their ambitious store opening plans, the discounters are also increasingly competing on convenience as they look to accelerate their store footprint.

Aldi, for example, is set to invest £550 million in opening a further 35 UK stores in 2024 alone and, having opened its 1,000th branch in Woking last year, is targeting reaching 1,500 locations. 

Meanwhile, earlier this year, Lidl announced plans to open ‘hundreds’ of UK stores as it looks to reach more customers, with its Chief Development Officer, Richard Taylor, saying the retailer “ultimately sees no ceiling on [its] ambition or growth potential.”

Pricer’s poll showed that 42% consumers are choosing to shop in a greater number of supermarkets compared to a year ago, with Gen Z (66%) and Millennials (64%) again the most likely demographics to display more fickle food shopping behaviours. 

Price (52%) proved the top reason for those opting to shop across more supermarkets, however the range of choice (40%) and quality (34%) also featured prominently in consumers’ motivations for shopping around for grocery items. 

33% said the choice of own brand or value ranges impacted their decision to shop across more supermarket brands, while 30% cited better ranging of vegetarian or vegan produce and 18% said access to higher welfare products was a key factor.

Peter Ward, UK Country Manager at Pricer, comments: “Overwhelmingly, our research shows a growing diffraction in supermarket loyalty among consumers.”

“Largely driven by pricing and cost-sensitivity, this plays naturally into the hands of the discounters, which is why they’ve continued a steep growth trajectory, with Aldi already overtaking Asda as the UK’s third largest supermarket earlier this year.” 

“However, while price remains at the fore, choice (both across branded and non-branded goods), quality and access to higher welfare produce are all also playing key roles in consumers’ motivations to shop around for their groceries, which gives traditional supermarkets another battleground on which to fight for share of wallet, rather than just a race to the bottom.”

2024 RTIH INNOVATION AWARDS

Physical stores are a key focus area for the sixth edition of the RTIH Innovation Awards, which is now open for entries.

The awards, sponsored by CADS, 3D Cloud, and Retail Technology Show 2025, celebrate global tech innovation in a fast moving omnichannel world.

It’s free to enter and you can do so across multiple categories.

Key 2024 dates

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.