Retailer shopping frequency boosts basket size and PL share

Posted by Oliver Koll on Jan 30, 2020

Households visiting a specific retail chain frequently do so for a number of reasons: such as they live close by and/or they may also be fond of the assortment, service or price level offered. While more frequent visits automatically result in a higher share-of-wallet for that retailer, we want to understand whether the typical basket varies between infrequent and frequent visitors to a specific banner. In particular, we investigated whether basket size and the propensity to buy the retailer’s PLs change. We compared these two metrics for shoppers that vary in trip frequency by retailer in both Germany and the UK and find that more trips to a specific retailer:

  • translates into bigger baskets. On average, across the top 8 banners investigated respectively,
    basket size among frequent shoppers (more than 20 visits) is substantially higher than basket size among infrequent shoppers (less than 5 visits). More specifically a 17% difference between rare and frequent shoppers in the UK and a 9% difference in Germany. The larger difference in the UK is partly due to Aldi where more visits most strongly translate into bigger baskets.
  • results in higher PL affinity: On average, the PL share of the typical basket increases by 10% between rare shoppers and frequent shoppers in Germany. In the UK this increase is less pronounced (only 1%), probably because PL shares have been at current (higher than German) levels for many years at a majority of retailers. Hence the perceived risk of buying PL from any retailer is likely lower in the UK than Germany.
  • We find one noteworthy exception: In contrast to Tesco’s brick and mortar stores more frequent trips to Tesco online do not result in larger basket sizes. Online trips are typically larger baskets and there may be a ceiling effect regarding a possible increase in value by more frequent shoppers.
    (see Figure for a selection of retailers).

Increased retailer visits boost basket size and PL shares at that retailer. Both these consequences are evidence that more occasions increase familiarity and foster trust.