Are consumers buying anything? A reflection on price wars, expectations brand loyalty

“Paprika is the new beef tenderloin!” a friend of mine jokingly – but not entirely wrongly – claimed when we were talking recently about how expensive everything is these days. The fact that we have become poorer in the last year has hardly escaped anyone, and it is not least noticeable when we shop for food. This has turned the spotlight on Sweden’s large food chains and resulted in a “price war” to succeed in presenting the best, biggest price reductions.

But which of the chain’s measures has actually worked out best? We asked the Swedes, and interestingly it turned out that ICA’s measure is considered to be the best in terms of content, but that Lidl is considered (to a significantly greater extent than others) to have faced the problems with rising living costs best overall. This applied regardless of which of the grocery chains you usually shop at the most. Furthermore, we saw that close to half, 46%, of those who feel that Lidl has handled the situation best state that they will shop more with them in the future.

Question: Which of the following grocery chains do you think has faced problems with the rising cost of living the best?

The fact that Lidl came out first with a price reduction measure – and that other players initially did not follow suit – seems to have benefited Lidl more than the design of the measure itself. If you want to read more about this, we write in more detail about the results we got at Resumé. There, we interpret this precisely against the background of prevailing expectations that the large food chains take a certain responsibility to meet our increasing living costs. Whether this benefits Lidl in the long term remains to be seen, of course, but we believe that this is a situation from which general lessons can be drawn. The bottom line is that it is not only important what a brand communicates or does, but also how. That is, how an initiative is received depends on timing, message and how it goes in line with the rest of the brand promise. We know that at Novus, which has extensive experience with measurements around price communication.

Question: Several of Sweden’s large grocery chains have tried to meet the rising cost of living in different ways. Which of the following actions do you think is best?

How do you succeed with that then? As a research consultant, the answer to that question is obvious; measure, measure, measure! A clear understanding of, and constant follow-up of, how the own brand is perceived by the target group is a cornerstone in the building and management of a strong brand that copes with both headwinds and tailwinds.

Lina Karlsson
Consultant Novus
lina.karlsson@novus.se

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