CHICAGO — Almost 9 of 10 US consumers are frustrated with escalating prices for groceries, gas, restaurants and other categories, sapping their loyalty to retailers and brands, according to the 2024 CPG + Grocery Consumer Report by marketing and communications firm R.R. Donnelley & Sons (RRD).

Of 1,819 shoppers surveyed by RRD and research partner Prosper Insights & Analytics, 88% expressed frustration with high pricing across categories. Most of consumers’ ire, however, was aimed at overall grocery shopping, as 86% of respondents said the rising price of groceries got them the most frustrated.

That finding primarily reflected vexation with elevated food and beverage pricing, cited by 80% of consumers, with 46% saying they’re “very frustrated” and 34% “somewhat frustrated” with the costs of these products.

Shopper pricing frustration also was high in other grocery store categories, including health items (cited by 78% of respondents), household goods (75%) and beauty care products (70%).

Irritation over grocery costs spanned all consumer age groups and income levels, Chicago-based RRD noted. For example, 87% of baby boomers polled voiced frustration over food and beverage prices, as did 79% of households with over $100,000 in annual income.

“Rising prices, especially in the grocery sector, are putting pressure on consumers across all income levels,” Beth Johnson, director of client strategy for grocery and convenience at RRD, said in the report. “Price sensitivity is a collective concern, presenting both a challenge and an opportunity for brands. To address this, we recommend that brands focus on offering value through personalized offers and relevant discounts. These strategies will help them adapt to shifting priorities, stay relevant and strengthen customer loyalty.”

Consumers take action

High prices for food, beverages and other consumer packaged goods have pushed many shoppers to adopt more value-focused purchasing behaviors, the RRD study found.

To stretch dollars, consumers surveyed said they’re employing such strategies as stocking up during sales (cited by 41% of respondents), buying fewer items (37%), switching to less-expensive name brands (37%), shifting to private labels (35%), using more coupons and discounts (34%), and sticking to their shopping lists (32%).

Also, 49% said they dine out less but spend more on food to cook at home, while 43% are willing to drive farther to save money on groceries.

“Consumers are becoming increasingly strategic in their shopping habits, a reflection of the pressure they face from rising costs,” Michelle Garcia, director of client strategy for consumer packaged goods at RRD, said in the study. “This shift is driving greater use of coupons, private label brands and careful shopping practices, signaling a need for brands to offer a range of value-oriented choices to stay competitive. CPG brands can position themselves as a smart alternative to dining out, giving shoppers both the savings they need and the premium options they want, as many are trading both down and up on groceries.”

What do shoppers want from grocery retailers and CPG brands? When it comes to choosing a store or product, 58% of those polled named fair prices as one of the top factors, followed by high-quality products (45%), coupons and discounts (41%), and data privacy (39%).

Consumers also said they prioritize relevant deals (59%), locally sourced products (57%), personalized discounts (55%), tailored recommendations (52%) and personalized loyalty communications (47%).

“Consumers are becoming more judicious with their purchasing decisions, in large part due to the continued impact of external factors, including inflation,” Johnson said. “These factors are testing the loyalty of shoppers, making it more important than ever for marketers to rethink how they engage with buyers. Brands will need to meet shoppers where they are by emphasizing value and savings to hold their attention.”

The retail front

Still, shoppers include more than price in their definitions of value, RRD’s research revealed.

When selecting stores to shop, 68% of consumers said they prioritize convenience and proximity to their homes, led by baby boomers (76%). Almost a third of respondents (32%) — including 39% of Gen Z, 37% of millennial and 38% of parent consumers — seek an engaging shopping experience, even if a certain store is farther away than other locations.

Particular store formats also are destinations for redeeming coupons. RRD’s report said supermarkets account for 59% of total coupon redemptions, though redemptions increased 37% at variety/discount stores and 9% at mass retailers compared with the first half of 2023.

RRD’s study also surveyed 254 decision-makers at US-based grocery, drug and mass retailers. Top tactics used by retailers to reach shoppers and cater to their preferences include loyalty programs (cited by 37% of respondents), in-store video (33%), interactive in-store experiences (33%), personalized coupons and discounts (32%), online retail media networks (31%), AI and machine learning (31%), and automated email marketing (30%).

Retailers, too, are largely aligning their technology investments with those tactics. Of those polled in RRD’s study, 35% named loyalty programs and personalized coupons/discounts as their top marketing tech investments over the next 12 to 24 months, followed by programmatic marketing and interactive in-store experiences (34%), cross-channel re-targeting (32%), user-generated content (31%), and customer data platforms and CRM systems (30%).

“Shoppers today are balancing convenience with the desire for a meaningful shopping experience,” said Michael Mathias, chief growth officer and senior vice president for digital media and Martech at RRD. “This shift presents a challenge for retailers. They must not only be close to their customers but also offer an engaging and personalized experience to stand out. While retailers recognize the effectiveness of tactics like loyalty programs and personalized offers, there’s often a gap between what they know works and where they choose to invest. Bridging this gap is best accomplished through a marketing culture that relentlessly tests, learns and implements new ideas based on real data.”

Loyalty challenge

RRD noted that the pricing conundrum faced by retailers and CPG brands means that consumer loyalty is no longer guaranteed.

Though 55% of consumers surveyed remain loyal to the stores they shop most frequently (including 64% of affluent and 61% of baby boomer shoppers), 45% of customers are ready to switch stores to reap more savings (including 50% of millennials).

Among respondents, 57% said they prioritize savings over loyalty, and the same percentage agreed that stores must offer more savings to keep their loyalty, with affluent shoppers (65%) most likely to agree.

Those findings reflect a top worry of retailers polled: 28% expressed rising concern about inflation’s effects on consumer purchasing power. That concern was higher (34%) among small retailers, with annual sales of $399 million or less. Other concerns cited by retailers included data security (46%) and their in-store experience (27%).

“Retailers are navigating a complex landscape where consumer expectations are evolving rapidly,” Hans Fischmann, vice president and general manager of nCountR by RRD, said in the report. “Shoppers value personalization, fair pricing and data privacy more than ever before, but loyalty is no longer a given. Retailers must continuously innovate and align their strategies with consumer demands to maintain loyalty and stay competitive.”