Only 26 per cent of consumers believe that they are really receiving the advertised discount off a recommended retail price (RRP), according to a survey conducted for KPMG by polling company Red C.
Price remains the number one factor influencing consumers’ purchases, the KPMG Next Gen Retail survey of 1,000 nationally representative adults found, cited by 65 per cent. This has increased from 58 per cent when the same question was posed in December 2021 but is down from a peak of 71 per cent in November 2022, it said.
Some 77 per cent said their choices were influenced by discounts, despite the widespread lack of trust in the true extent of the discounts advertised by retailers.
More than half of consumers (51 per cent) said loyalty programmes made them more likely to shop with a particular retailer. However, loyalty programmes were not a deal-breaker for most, with only 18 per cent saying they would avoid shopping with a retailer that does not have one.
The absence of loyalty programmes, however, is more of a negative among younger groups, with 29 per cent of 18–24-year-olds and 25 per cent of people aged 25-34 indicating they avoid retailers without a loyalty scheme.
“Discounts, deals and loyalty programmes have grown in importance since the advent of higher inflation,” said KPMG head of retail Keith Watt.
“Our research shows that customers prefer retailers with loyalty programmes and we’re seeing retailers who have historically not had them introduce these in the last few years, with competition intensifying as consumer prices and input costs rise.”
Mr Watt noted that some retailers are making certain discounts available only to those who tap their loyalty card at the till and that this was effectively a dual pricing regime.
Supermarket giant Tesco is among those to have adopted this approach, with shoppers not in possession of a Tesco Clubcard charged higher prices for certain goods.
While many consumers are “sceptical” of the discounts advertised by retailers, it is too early to say if recent legislative efforts to make discounting more transparent have been effective or not, Mr Watt concluded.
“Many consumers are very price aware and can easily find the best available price online. With online low-cost options ever increasing, retailers are increasingly challenged with finding new ways to maintain their customers’ loyalty.”