Why we’re seeing an influx of supermarket loyalty programs

First there was the Tesco Clubcard, then Sainsbury’s Nectar prices, and now Morrisons and Co-op have jumped on the loyalty membership bandwagon. UK supermarkets are scrambling to coax customers by offering discounted prices after the cost of living crisis pushes many to the discounters. Read on for more on this, plus the other top headlines in our Power to the Pricing People news roundup.

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U.S. grocery prices increase the most since the 80s

A report from the U.S. Government Accountability Office has revealed that between August 2021 and August 2022, grocery food prices in the United States experienced the largest annual percentage increase since the 1980s, with an average increase of 11%. Detroit had the highest increase at 14.49%, followed by Dallas-Fort Worth at 14.03%. Factors contributing to the price increase included the pandemic, increased consumer demand, droughts, the Avian influenza outbreak and Russia’s invasion of Ukraine.

Read about other factors linked to the historic price hikes and how federal agencies are trying to mitigate them. 

Australian consumers continue to spend on little luxuries during tough financial times

At our event on profitability, pricing and supply chain earlier this year, Senior ANZ Economist Adelaide Timbrell predicted that spending on services and certain CG sectors would continue to perform well, in line with the “lipstick effect” where consumers treat themselves with more affordable luxuries during difficult financial times. 

This has been supported by a recent study by Compare the Market, which found that even during challenging economic times, Australians are still prioritizing spending on small luxuries. The research found that alcohol, takeaway meals, coffee and health and beauty appointments were among the top luxuries Australian consumers aren’t willing to go without despite the rising cost of living. More than a quarter of consumers don’t want to sacrifice social outings, though this is even higher at 33.2% for Baby Boomers. When it comes to fast food, one in five Gen Zers said they won’t sacrifice takeaway meals compared to just 11% of Boomers.

Read more about the other little luxuries different generations aren’t willing to part with. 

UK supermarkets compete on milk prices and loyalty programs

There’s been a milk pricing war happening in the UK lately, with four major supermarkets slashing prices in an effort to lure in shoppers. With figures indicating grocery prices have increased by more than 17% over the last year, supermarkets are doing what they can to retain customers and fight off the mass exodus to discounters. On top of milk prices being cut, three of the UK’s leading supermarkets have introduced new loyalty programs in the last month to rival Tesco’s Clubcard and offer discounted prices to shoppers.

Read about why experts are hopeful this could drive down food prices.

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