Marks & Spencer ’most improved’ food retailer
Marks & Spencer has been rated the most improved UK food retailer for customer loyalty over the past ten years in a new survey.
Asda was rated the retailer with the most loyal customers overall, with M&S coming second having improved its customer retention rate substantially, according to the survey by market research company TNS.
In 2000, M&S had the worst retention rate of any of the major UK retailers.
The other top retailers were Waitrose in third place, followed by J Sainsbury, Aldi, Tesco, Morrisons and Aldi. The Morrisons group and Aldi were found to have struggled with customer retention during the survey period. The Co-operative Group, the fifth-biggest grocer since its acquisition of Somerfield, has been excluded because it has not yet converted all of the Somerfield stores.
‘Retention’ measures customer loyalty based on how likely shoppers are to return to a store and recommend it to family and friends.
Despite initiating a recovery plan in 2004, the last two years has seen M&S losing market share and being hit by falling profits.
Gemma McIntosh, of TNS, commented“These [loyalty] figures show M&S is a real success story. Back in 2000, sales were falling and credibility was low. But the effort to modernise the brand has been hugely successful.”
McIntosh said the retention may be attributed to the rapid modernisation of stores and brand identity, as well as M&S’s Dine in for £10 campaign.
McIntosh said: “Morrisons have gone from being a northern store to a nationwide store and that happened overnight. It had a loyal customer base up north and they have diluted that emotional affinity.”
New, better-off customers tend to use Aldi for specific items, which reduces its loyalty score.
McIntosh added: “Tesco and Asda have been marketing very hard and direct on price. Sainsbury’s score may also be a hangover – perceptions don’t change as quickly as prices.”
TNS says that Sainsbury’s has improved customers’ price perception, but despite this only 30% rated the retailer “good” or “very good” for value, compared with 68% for Asda and 48% for Tesco.
McIntosh commented: “Tesco and Asda have been marketing very hard and direct on price. Sainsbury’s score may also be a hangover — perceptions don’t change as quickly as prices.”