UK Loyalty Movement Report: Grocery

‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analysed billions in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

Customer behaviour isn’t fixed—shoppers move between loyalty segments over time. Our UK Grocery Loyalty Movement Report analyses national grocery spend to track these shifts, helping retailers identify churn, improve retention, and strengthen customer relationships.

Grocery Category Loyal Customers

On average, 75% of a merchant’s customers are not actually loyal. But the loyal segment (25%) has a much higher share of wallet (67%) than a not loyal segment (13%).

Top Customers (top 20% of most frequent transactors) still show that 25% are not loyal customers. Yet the loyal customer segment shows a 2x higher share of wallet.

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Findings

We looked into purchase data at all groceries in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behaviour.

Grocery Loyalty Movement

Overall, quarter over quarter, 50% of customers tend to remain in their existing segments while 50% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment Movement

While all segments show purchase behaviour movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (30%)  and down (47%) - into other segments. 

Grocery Leaky Bucket

Grocery brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most rigid (with 67% and 65% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behaviour change, with only 9% staying the same, showing extreme volatility. ‍
• Loyal customers are far less likely to churn. Tied Customers are 56% more likely to churn (moving to Prefer or Lapsed) and customers that Prefer the competition are 200% more likely to churn!

Definitions of Customer Segments

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Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways - Building Grocery Loyalty in the UK

Loyalty in the UK grocery sector is highly unstable. Only 25% of shoppers are truly loyal, yet they contribute 67% of their share of wallet (SOW) to a single merchant. Even within the top customers, 25% are still not totally loyal. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Implement an always-on engagement strategy to keep customers connected, regardless of purchase frequency. 
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics provides comprehensive Customer Loyalty Analysis, delivering insights into loyalty movement, churn risk, and retention strategies to help grocery brands drive long-term customer value. Contact us to learn more

‍* For this report, we've selected the entire Grocery category in our data, collectively representing over $200bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.‍