Measures of customer loyalty have dropped for supermarket giant Tesco, which slipped from first place in 2004 to sixth place this year, according to Millward Brown’s analysis of customer loyalty for the top ten grocery stores in the UK. The Brandz survey found that Waitrose is the supermarket with the most loyal customers, followed by Marks & Spencer and Sainsbury’s.
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Somewhat surprisingly, discounters Aldi and Lidl score more highly in the rakings that either Asda or Tesco, coming in in fourth and fifth place respectively.
Despite its declining customer loyalty, Tesco outperforms all the other top ten UK grocers in terms of product choice and trend setting, the survey found. However, its measure of customer loyalty has dropped to 0.5 on the Voltage Measure, compared to 6.9 for Waitrose, 4.8 for M&S and 3.4 for Sainsbury’s. The Voltage Measure is also considered a good indicator of the likelihood of a brand to grow.
“Waitrose is maintaining a unique identity that appeals to consumers, while M&S is recovering strongly and Sainsbury’s is getting its confidence back. The huge decline in customer loyalty for Tesco, at a faster rate than any other British grocery store, is an indication that many consumers are acting on a growing desire to buy quality products whatever the price,” Peter Walshe, global brand director at Millward Brown, suggested.
“Waitrose and M&S are making the most of this trend with their strategies to sell on added value rather than price, something which is increasingly appreciated by their constituencies,” Walshe continued.
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By GlobalDataThe Brandz survey found that most consumers, 70%, believed Waitrose offer better quality produce compared to Tesco’s 26%, which was down 5% from the previous year.
Asda leads on being the store that most consumers believe offers more acceptable prices (56%) followed closely by Tesco at 54%.
Tesco is not only under attack on quality and service from Waitrose, Sainsbury’s and M&S, but also on the price front from Aldi and Lidl as well as Asda. Walshe says “The Germans are coming as can be seen by their rise up the loyalty ladder.”
“Sales of Tesco are doing well despite dropping customer loyalty”, concluded Walshe. “They are still the most popular British supermarket. British consumers like to grumble but often act differently: convenience and location play a big part in their decision to continue to shop at Tesco.”
