LOYALTY PROGRAM USE ROSE LAST YEAR: SURVEY

DAVID GHITELMAN

SCOTTSDALE, Ariz. -- The number of U.S. households participating in frequent shopper programs reached 74% in 2000 -- up from 70% in 1999, according to the fifth annual Frequent Shopper Survey scheduled for release today by ACNielsen U.S., Schaumburg, Ill.

Todd Hale, ACNielsen senior vice president, consumer analytics, announced the findings in a presentation to the Food Marketing Institute's Advertising Marketing Executive Conference here.

In an interview with SN prior to the conference, Hale said, "The increase is strictly driven by more retailers offering frequent shopper programs."

He explained that it's a pure "if-you-build-it-they-will-come" situation. "If you offer discounts to shoppers, they will take advantage of them," he said.

According to Hale, frequent shopper programs have become an integral part of the grocery shopping experience. "Despite several high profile program eliminations last year," he said, "frequent shopper programs are alive and well.

"In fact, the availability of a frequent shopper program is the third most important reason why program members choose the store where they shop most often. Only 'convenient location' and 'store deals' ranked higher."

The five markets tracked by ACNielsen with the highest percentage of households belonging to a FSP are Phoenix (97%), Chicago (96%), Baltimore/Washington (94%), Charlotte (93%) and Denver (91%).

Hale told SN the participation rates are very closely related to the availability of programs. The participation rate in New York has climbed to 82% -- a nine point increase over 2000 -- due largely to the introduction of programs by Pathmark and Foodtown, he said.

He also noted that a majority of frequent shopper program members (59%) participate in two or more programs.

Other markets where participation grew strongly in 2000 include Houston (81%, up 30 points), Columbus (43%, up 29 points), Baltimore/Washington (94%, up 16 points), and Boston (84%, up 12 points).

Markets with the lowest FSP enrollment rates include Miami (7%), San Antonio (19%), St. Louis (23%), Columbus (43%), and Atlanta (54%).

More than 46,000 households in the ACNielsen Homescan consumer panel participated in the study, which was conducted in October and November.