Brand Loyalty Falters in the Face of Inflation

Also, many consumers, already struggling, expect a recession.

April 06, 2023

ALEXANDRIA, Va.—“High inflation has made consumers cut back on everything but the necessities, and an unexpected characteristic has hit the chopping block: loyalty.” That’s according to PYMNTS.com, which cites research that about half of consumers have changed retailers as they seek price relief, and approximately two-thirds of consumers consider price when choosing a large retailer.

In the survey of 2,136 U.S. consumers in early March, half of the respondents said finding a better deal has become a more important factor than it once was when choosing where to buy retail or grocery items, and 44% of grocery and retail shoppers said they would buy a different brand if it were less expensive than their favorite.

Approximately half of the shoppers have shifted their purchasing to less-expensive merchants in response to overall price increases, with 56% of retail shoppers saying they have moved at least some of their spending to less-expensive brands; 47% of grocery shoppers say the same. For 18% of retail and 21% of grocery shoppers, switching brands has become the prime way they offset the impact of higher prices on their household budgets.

As expected, the overall economic situation is generating stress. The data found that 61% of consumers experience high levels of concern about the near-future economy, and 57% said they expect an imminent recession. These expectations don’t vary among age groups or income levels, which suggests that the target audience for all products and services is wary about the future. In addition, 45% said they are experiencing increased difficulty paying bills.

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