Loyal consumers break up with favorite brands

Consumers are dumping the brands they once adored ... and opting for flings with lesser-known products ranging from laundry detergent to food.

In 2007 and 2008, 20 percent of brand-loyal customers were having one-night stands with new brands while keeping the old, while 33 percent of these brand-loyal customers dumped their old loves altogether.

A PR WEEK article reports that less than half (48 percent) of highly loyal customers, those defined as "shoppers who made 70 percent of their category purchases with a single brand during a 12-month period," remained dedicated to the brand in 2008. In addition, 33 percent of these customers completely stopped buying the brand even while they continued purchasing items in the same product category.

The recession is playing a large part in the brand loyalty break up. In this economy, retaining customers is a challenge. Catalina Marketing Corp's CHKHDC.UL Pointer Media Network reports only four out of 10 brands kept around half of their highly loyal customers from 2007 to 2008. This report was based on purchasing data from 23,000 stores nationwide.

Which brands lost loyalty? Coca-Cola Classic and Procter and Gamble Co.'s Crest toothpaste to name a few. Reuter's reports Walmart Stores Inc., Safeway Inc., and Kroger Co. are a die-hard brands expected to do well. Their prices are low, and may gain loyalty due to the recession.

Bigger isn't better with shrinking grocery stores

In an industry that has long declared "bigger is better," many supermarkets are opening increasingly smaller stores, according to the New York Times.

The article reports that Safeway has already opened a smaller store in California and Whole Foods and Wal-Mart are contemplating doing the same.

The previous mentality within the industry seemed to be that offering the largest selection would attract the largest customer base, but that is being reconsidered. Shoppers often go to the grocery store on the way home from work or to pick up a few last-minute items and in those cases the speed of the visit is very important.

A trend toward more prepared and ready to eat foods is also contributing to the shrinking stores. The article reports that themany of the plans for these smaller stores still include large deli counters and quick-meal options.

Big supermarkets continue to be very successful, so the trend is likely to emerge in new locations. Instead of building increasingly larger stores, more major supermarkets are planning to downsize their new branches.

A relatively new entrant in the US market, the British retailerTesco, has pursued the "shrinking store" strategy in the Southwest.

The article reports the company has opened more than 70 stores in the past year alone. Retailers are hoping that revisiting the concept of the small localgrocery store will keep their customers loyal.

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--Bridget O'Sullivan

Corporate giants go solar for savings

The biggest store chains in the U.S. are now seeing solar panels as a huge way to save energy and money.

According to The New York Times article, Stores such as Wal Mart, Kohls, Safeway and Wholefoods Market have installed solar panels on their roofs to generate electricity.

At this point, around 10 percent of each chain has solar coverage, but a large increase can be expected. There is a race in place, to beat the Dec. 31 deadline to gain tax advantages for these projects. Although coal is less expensive, companies believe they can save money by economies of scale.

Cutting back on coal and going solar will save these companies a lot of money and help the environment by using renewable resources.

"It's very clear that green energy is now front and center in the minds of the business sector," says Daniel M. Kammen, an energy expert at the University of California, Berkeley. "Not only will you see panels on the roofs of your local stores, but I suspect very soon retailers will have stickers in their windows saying, "This is a green energy store."

Most companies buy their own solar power systems up front, which may cost between $4 and $6 million dollars for a large store. Agreements can be made as well, where the utility company pays the up-front costs and gives stores a break on the high solar power bills.

Corporations are also looking to other forms of renewable energy, such as wind turbines, sky lights and white roofs that help to save money on cooling. Bernard Sosnick, an analyst with Gilford Securities believes, “It’s not as over the horizon as it might seem."

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