Increasing Cost of Living is Damaging Brand Loyalty

For more analysis on this topic download our new report Losing Loyalty: Why Consumers are Walking Away From Brands.

Inflation-weary consumers are fed up and making big changes to accommodate their budgets. For brands, that unfortunately means losing formerly loyal customers. We set out to understand how customer loyalty is shifting and heard one thing loud and clear: everything is too expensive. Inflation and its resulting household budgetary pressures caused consumers to pull back on spending, shifting their brand relationships.  

Consumers say they’ve been spending more money first and foremost on groceries, restaurants and apparel. These are the same categories where shoppers say they’ve either stopped shopping from a brand or shopped that brand less frequently. 

Shoppers are abandoning their favorite grocery and restaurant brands

When we asked survey respondents to categorize the brands they’ve recently stopped or reduced purchasing from, we saw responses that ran the full gamut of consumer products and services. Food dominated the list, with grocery and restaurant brands tying for first place. Retail categories like apparel and personal care follow. Most (66%) shoppers who have reduced their shopping with a brand say they’re just buying less frequently and haven’t given up on their favorites entirely.

These day-to-day categories are where consumers make more frequent decisions and where they have a plethora of choices, making it much easier and lower-risk for shoppers to switch up their brand choices, as opposed to travel where decisions are infrequent. 

Affordability is the primary reason shoppers are changing up their brand relationships

When asked why they shopped from a brand less, or stopped altogether, fully two-thirds (67%) of respondents said they did so to save money. About one-in-five (21%) said that they stopped using a product because it became too expensive, and 19% said they just found a cheaper alternative. Affordability concerns also dominated the open ended responses when we asked for more detail.

The share of consumers who agree that they “tend toward the less expensive or more affordable option” has steadily increased since 2021 and largely leveled off in 2024 for all income groups. This is a big win for value-oriented brands, and most consumers aren’t showing signs of reverting to a spendier mindset. 

Secondary issues that cause customers to break up with their favorite brands include lifestyle changes that require purchasing different products, like pursuing a healthier diet. 

Issues with the brand itself were not mentioned as frequently, but when disappointment did come up respondents mentioned declining quality, bad customer service experiences, or ethical issues like the recent trend of brands abandoning their DEI commitments. 

Swapping to cheaper brands is a win for consumers

For the 44% of respondents who swapped one brand for another, most are saving money. Not only are they benefiting from cost savings, these shoppers are also satisfied with their new brand. Plus, it doesn’t seem to be a particularly arduous task to find a replacement. Most (86%) shoppers said they found an alternative they liked within the first 3 new brands they tried.

Worse for brands, some customers are just biased toward novelty, making winning their loyalty even harder. Gen Zers in particular are prone to trying new brands. This is especially true in apparel, where 51% of Gen Z respondents said they’d reduced or stopped their shopping from a particular brand. 

Winning these customers back means overcoming the baggage that rising prices created: 45% of consumers surveyed said they hold a grudge against at least one company, if not more. With customers generally satisfied with their replacements, it’s a hard case to convince them to return.