Netherlands-based multinational grocery retailer Ahold Delhaize is seeing its loyalty bets pay off in the United States.
In a presentation to analysts Wednesday (Nov. 9) accompanying its third-quarter 2022 earnings release, the grocery giant said its U.S. arm, ADUSA, has seen its loyalty programs bring in more than $1.5 billion in incremental sales so far this year. In the U.S., its brands include Food Lion, Giant Food and FreshDirect.
This is because its U.S. customers saw more than a 50% increase in personalized offers than the previous quarter, totaling some 8 billion in different targeted ads and promos. The grocer touted roughly 80% loyalty sales penetration in the U.S. while noting its loyalty sales reached 60% customer penetration in its home region, Benelux.
“In the face of increasing price pressures, it is everyone’s job, across the value chain, to keep prices as low as possible for customers,” Frans Muller, president and CEO of Ahold Delhaize, said in a statement.
Certainly, rewards programs can be a powerful tool when it comes to driving frequency despite these challenges. Data from PYMNTS’ study “Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022,” created in collaboration with Toshiba Global Commerce Solutions, indicates that 42% of grocery shoppers stated that the availability of loyalty programs with rewards they like would improve their loyalty to merchants.
Notably, however, only 5% of consumers stated that loyalty programs are the single most influential factor when selecting a grocer from which to purchase. More important to most grocery shoppers are factors such as price and proximity.
Get the study: Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022
Delivering relevant offers to consumers is one of the factors that can separate a successful loyalty program from the rest. Across regions, Ahold Delhaize has been investing in using its customer data to target deals and offers. Per the presentation, the company overall has been focusing on “delivering personalized value through our digital omnichannel loyalty programs.”
It would appear that these digital efforts are seeing some success, with the company’s online grocery sales increasing 17% year over year. Plus, in the United States, online sales across categories were up 21%.
The company’s rewards efforts are especially key right now, with inflation-concerned consumers seeking out lower-priced options. Research from the PYMNTS study The New Reality Check, created in collaboration with LendingClub, which draws from an August survey of nearly 3,500 U.S. consumers, finds that 69% of consumers have found product price increases for groceries to be very or extremely considerable, and another 20% found these increases somewhat considerable.
Get Your Copy: The New Reality Check
Moreover, data from the August edition of PYMNTS’ Consumer Inflation Sentiment study “Consumer Inflation Sentiment: Inflation Slowly Ebbs, But Consumer Outlook Remains Gloomy,” from a survey of 2,169 consumers, finds that 86% of consumers have modified their grocery purchasing habits in response to inflation. Common actions taken include cutting down on nonessential spending, switching to cheaper merchants and shifting to lower-quality items.
Read the full report: Consumer Inflation Sentiment: Inflation Slowly Ebbs, But Consumer Outlook Remains Gloomy
“Despite increasing macro-economic and geopolitical challenges, we continue to make important progress on delivering our strategy,” Muller said. “As always, striking the appropriate balance between supporting our associates, investing in our customers and local communities, prioritizing our digital and omnichannel transformation and playing our part in the transition to a healthy and sustainable food system will guide our decision making.”
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