They call them “loyalty” cards, but many of us have stacks of them weighing down our wallets and keychains, from nearly every store we shop at. So does being “loyal” to all, mean we’re really loyal to none?

That’s what one of the country’s largest supermarket chains is struggling to figure out.

Food Lion introduced its MVP Rewards Card nearly 20 years ago, so customers are well-trained by now to use it. 85% of the store’s sales are done through its loyalty program. But it turns out the majority of these “loyal” customers are actually not the least bit loyal. They just like the sales, and skip everything else.

“Most of our core customer see Food Lion as a store to buy groceries at good promoted prices and to shop only part of their everyday essential store items,” bemoaned Pierre-Olivier Beckers, the CEO of Food Lion parent company Delhaize, last week. The average number of items that a Food Lion customer buys is just ten – far from a full shopping cart. “Our proportion of dairy and fresh products is below traditional grocery competitors,” Beckers noted. “Clearly, in categories such as meat, produce, bakery and dairy, we do not get our fair share of sales.”

So, in other words, Food Lion has one of the most well-established and well-utilized loyalty programs in the industry – but it’s getting picked clean by cherry-pickers who come for the deals, and go somewhere else for the rest of what they need. If you’re one who does that, Food Lion is trying to come up with a way to get you to stick around and buy more stuff. Oh, and if you would buy more of that stuff at full price, that would help too.

But how can Food Lion convince us to do that? The store has gone back and forth on the benefits of offering everyday low prices, versus higher regular prices and more sales. Once a committed “everyday low prices” kind of store, it started getting more promotional in recent years, advertising more sales and specials. It’s since backtracked a bit – offering “new lower prices on thousands of items”, but then raising them again when it decided some prices were too low (read: “Everyday Low Prices? No Thanks.”)

Today, Beckers said, 35% of Food Lion’s sales are on promoted items. That’s great for budget-minded shoppers. But not so great for Food Lion, which would be making much more money if customers also bought more non-promoted items – ones for which there are rarely any coupons or deep discounts – in the fresh food departments. “Food Lion is crying because it is underperforming in these departments,” one well-connected industry observer who did not want to be named told Coupons in the News. “No one ‘gives’ a department a ‘fair share’ – each department must earn the share its receives. Food Lion is not obviously earning its ‘right share.'”

That could be because many Food Lion customers aren’t convinced they even want to shop the whole store. Just look around the internet to see what some shoppers are saying. “Food Lion used to be my primary store, but quality and prices drove me elsewhere,” one commenter recently wrote on the Virginian-Pilot’s website. “Who wants to pay a low price for produce from Food Lion when it spoils in a day or two?” said another, adding that “the stores are disgustingly filthy.” On the Salisbury (North Carolina) Post’s website, one commenter observed that not only is Food Lion “lacking in quality and prices but whatever happened to good, old fashioned customer service?” Another said simply, “I drive past two Food Lions to go to Harris Teeter.”

Food Lion knows it has an image problem, so it’s been working to refresh its stores. Beckers reports that nearly 80% of the chain’s locations have now been “repositioned”, with the rest due for completion in the coming months. “We are currently involved in making Food Lion a more differentiating shopping experience,” he said. Using the buzzwords “easy, fresh and affordable,” he said the goal now is to make Food Lion “a true convenient neighborhood supermarket, and making it easy for customers to buy their daily food items.” That means decluttering stores and adding more fresh offerings, in an effort to “transform Food Lion from a large convenience store, more to a convenient neighborhood supermarket.”

Will that be enough to turn Food Lion’s “loyal” card holders into true loyal customers? Our industry observer says there’s a lot more to it than that. “Why isn’t Food Lion using its customer data to improve the results of these departments?” he wondered. “It has all the data to draw from for better decision-making.” He said the customer information that Food Lion gathers from all those MVP card purchases must be made “central to its strategic, promotional and merchandising decision-making process.” The next generation of loyalty programs includes personalized offers targeted to your own shopping habits – not just generic discounts that you need a card to get. As retail veteran Ralph Jacobson has told the industry website Retailwire about stores’ frequent shopping cards, “if the ‘loyalty’ program doesn’t generate a compelling reason to shop that specific store or that specific brand, then it’s only a mass, untargeted discount program.”

“The key to Food Lion’s future?” concluded the industry observer, “Commit to the customer. Then understand and reward profit-enhancing behavior. It can be done. It is being done by others. A committed Food Lion can do it, and start growing again.”

Otherwise, all the “repositioning” in the world may not be enough to change shoppers’ minds, that Food Lion is a good place to get sale items – and nothing else.

3 Comments

  1. Today was the first time I’ve been in Food Lion in years only because I just left Walmart an 1/8 of a mile from them and forgot one, small, inexpensive thing. I didn’t feel like turning around so I decided to stop at Food Lion. The store was clean and the associates were nice. It was really slow. I don’t know how they make payroll with Walmart right there. I was also pleasantly surprised to see a coupon machine at the front that printed coupons that I can actually use. Honestly, I will be using them at Publix, Harris Teeter or Bi-LO since they accept competitors coupons along with a manufacturer and have a large BOGO selection every week and you don’t have to purchase 2 of the items. Food Lion needs to target couponers.

  2. This may be an old post, but nearly every family struggles with the ever rising cost of grocery items and other goods for their family. One of the things that peeve me off is the advertised items listed at regular price, its NOT-ON- SALE. Sometimes I go to a competitor and find lower prices on common goods just walking around the store… Walmart is taking over the grocery industry with their low prices and who will slip in a few items which are over-priced as a convenience LOL. To pull customers away from the competition, the overall cost of a grocery trip must be attractive to budget conscience consumers.. Food Lion is just like other corporations, its all about meeting profit targets and consumers are fed up dumping a load of cash on necessaries while the company is rapidly growing because you can’t go without food.

  3. The reason I drive past two Food Lions and shop elsewhere is it takes TWICE AS LONG to check out. Making the chashier check out then bag the groceries might save Food Lion a buck, but since Piggly Wiggly has a bagger that’s bagging my crap while the cashier rings it up, it cuts my checkout time in half.

    The “no bagger” thing might work well at WalMart where I rarely buy more than a dozen items. When I’m checking out with a cart full of groceries. Sorry, food lion. I just don’t have the time to hang around all day waiting on slow-moving 19 year old girle to carefully bag my stuff while trying her hardest not to break a nail.

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