Many of us are creatures of habit. We drink in the same pub, follow the same team, frequent the same restaurants, holiday in the same resort. However, up until recently, we did not always go to the same supermarket. This was because keen price competition between rival chains pulled shoppers in different directions. But now that has changed. By far the greatest development in the grocery trade in this decade is the drive to win customers' loyalty. As the competition for market share reached intense levels, the penny dropped with supermarket executives that it may cost less to hold on to customers than it does to entice new ones.
The launch by Dunnes Stores of its "value card" despite years of eschewing loyalty schemes, confirms the trend. The Superquinn group started Europe's first loyalty scheme five years ago, a scheme since copied as far away as Brazil. In Britain, Tesco introduced a scheme and its arch rival, Sainsbury's, initially decided not to follow suit. Now, according to reports, it is in active negotiation to set up a scheme.
The initiative by Dunnes Stores may well have been influenced by Tesco's recent acquisition of Quinnsworth/Crazy Prices and the certainty that the Tesco loyalty card, in some form, would soon be on offer here. It is also the case though that competition is destined to intensify greatly for all supermarkets and convenience stores. Wellworth/Safeway is expected to enter the market, Sainsbury might as well, food halls have arrived, Marks & Spencer plans three new stores, vast shopping centres are coming on stream, Superquinn has expanded south. Meanwhile, the convenience stores are fighting back, but successfully so in only some locations.
Tesco's £630 million outlay for Quinnsworth/ Crazy Prices indicates an opinion across the water that the market here is soft. Tesco expects significant profit improvement by benefiting from lower purchasing costs (through being a bigger buyer), better management systems and greater emphasis on service. The chase is on for more market share and it is unlikely to be fought on the battleground of price wars because, all too often, they serve only to wound all the participants. Far better to apply resources to building up customer loyalty.
The swing towards the multiples in grocery shopping is not all good news. It will drive some small shops to the brink of viability in urban areas and cause closures to occur in rural areas. In so doing it could reduce choice and increase car dependency. Large out of town shops pose a real threat to town centres and the consequence could be, if the United States experience is anything to go by, abandoned and dangerous town centres. The downside of the growth of multiples can be contained but it needs vision and determination on the part of the authorities. There is no reason why the Irish shopper cannot continue to enjoy the best of both worlds.