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June 26, 2021

Brand loyalty -- on the way out

By Jason Buckland, Sympatico / MSN Finance

“I’ve done commercials for Coke and Pepsi … If you wanna know the truth, can’t even taste the difference. Surprise! All I know is Pepsi paid me most recently, so … tastes better. That’s pretty much how it goes.” – Dave Chappelle, For What It’s Worth

I can remember, not long ago, grocery shopping at various supermarkets and watching the no-name products all but collect dust on the shelves.

Yeah, they had their market share, but for the masses doing their food runs at any store other than Price Chopper, no-name products – whether we’ll admit it or not – often felt the mighty swat of Lipton, Ruffles, General Mills or whoever.

Yet (and I swear I’m not making this up) there’s appeared to be a seismic shift in consumer choice since the economy tanked, and now we finally have proof.

Recent studies now show conclusively that brand loyalty is on the way out as shoppers try to stretch every buck further.

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A survey by the Chief Marketing Officer Council has found that of “highly loyal” customers (those who make 70% of their category purchases with one brand), less than half remained devoted to that same company in 2008. What’s more, about 33% “completely defected to another brand in the same category” that year, according to Reuters.

The study also traces the downfall in loyalty to iron-clad brand names like Advil (down 7%), Coca-Cola (down 25%) and Procter & Gamble (down 59%), banging home the point no one is safe in the modern recession.

Of course, the major retailers are hip to this development, leading to chains like Wal-Mart expanding their own private labels. We discussed how a crummy economy was going to result in more no-name brand business back in February, but now that it’s measurably here, the same question stands:

“We’re not exactly blowing your hair back by telling you this shift is a result of an economic nightmare we’re not quite out of, but we do wonder what this trend will mean looking forward.

“But when things rebound – and Heinz and Quaker Oats and Nestle are all back in full force – where will we go?

“Do we learn from the recession and carry on with our smarter shopping, or go right back to our regular visits with Toucan Sam and that creepy Hamburger Helper mitt?”

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...