With inflationary concerns continuing to weigh heavy on consumers’ minds and budgets, Albertsons Companies is seeing loyalty growth by the millions.
The grocer, parent company of a range of popular supermarket chains including its self-titled brand as well as Safeway, Vons, Jewel-Osco and others, reported its first-quarter 2023 earnings results Tuesday (July 25), once again declining to hold an earnings call amid its pending merger with Kroger.
In the quarter, the company’s loyalty program membership grew by 16% to nearly 36 million, up by about 2 million from last quarter.
“Our first-quarter results demonstrate the resilience of our business and the effectiveness of our ‘Customers for Life’ transformation strategy, even as the economic environment has become more challenging,” CEO Vivek Sankaran said in a statement.
“We are also mindful of the evolving economic backdrop, including slowing food inflation, declining government assistance and higher interest rates, and their potential effects on consumer spending and our business,” Sankaran added.
The “Customers for Life” push is a strategy the company first announced last year, which includes, among other pillars, getting customers more engaged with the brand’s eCommerce and loyalty offerings, and personalizing their digital experience and their promotional offers.
Certainly, consumers want relevant deals. Findings from the March edition of PYMNTS’ Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which drew from a survey of more than 2,100 United States consumers, indicated that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.
Plus, these kinds of offers can keep consumers coming back, improving their shopping experiences. The “2023 Global Digital Shopping Index,” a PYMNTS and Cybersource collaboration, which drew from surveys across six countries spanning more than 13,000 consumers, found that 80% of U.S. shoppers who used coupons were very or extremely satisfied with their merchants’ digital offerings. In contrast, only 60% of those who did not use coupons said the same.
Sankaran may be highlighting the “slowing” of food inflation, but consumers are more concerned with the cumulative burden of years of inflation than the declining rate. Consumer Price Index (CPI) data from the Bureau of Labor Statistics (BLS) showed that, in June, grocery prices rose 4.7% year over year on top of a 12.2% increase last year, amounting to a 17.5% increase relative to 2021.
“In terms of consumer sentiment, inflation is right up top as far as their concerns for the economy, so this still is a very significant issue for them,” Alex Weinstein, chief digital officer of online grocer Hungryroot, told PYMNTS last week.
Consumers continue to make changes to their grocery shopping habits to manage spending amid inflation. According to data from PYMNTS’ May report, “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” which drew from a spring survey of more than 2,000 U.S. consumers, 57% of shoppers have cut down on nonessential grocery spending, and 47% have switched to sellers that offer better prices on groceries.