Customer loyality will become a challenge for retailers

The market place is facing a period of change due to the current credit crunch. The future holds a challenge for retailers to retain consumer loyalty that has been built over the last decade.

Speaking at the Pig and Poultry Fair in Stoneleigh this week, Andy Carter, senior buyer for Tesco, said that consumers are feeling the pinch and have less money to spend.

They are choosing to trade down from the supermarket of their choice to the one below, in order to save money on food bills, he said.

The discounter market is actually becoming more powerful in the UK and for much of this, the products are being bought and produced abroad which will challenge all the retailers in the country.

It will also provide the customer with even more opportunity to trade down, he added.

There are declining sales in the UK of white and brown goods such as TV, DVDs and washing machines. These types of products are critical in consumer confidence, said Mr Carter.

Customers are now making a choice about when they replace products in their homes, when they trade in their car and when they go on holiday. And there is an on going threat of job insecurity, added Mr Carter.

There is a growing focus on the welfare methods behind the pig and poultry industry that is driving consumer demand. We see this industry growth in areas such as free range and organic.

Invariable these sectors cost more to be a part of, so there is a challenge, as the consumer has less to spend. We need to make sure they still buy free range and organic, he said.

Consumers are asking for clarity about what is being sold to them and need more information to make informed choices.

The increase in imported products is an area of concern but regional sourcing could provide a opening to resolve this, as consumers are prepared to buy into products that they believe are of a lower carbon footprint, he said.

There is a lot of opportunity to get it right and to produce and buy in what the consumer wants, added Mr Carter.