The past few years have tested grocery shoppers and retailers in new ways. Everything from ongoing tariff adjustments to shifting trade policies have influenced how consumers assess price points and value, both of which are factors that directly shape brand loyalty.
For shoppers already feeling squeezed by inflation, these continued tariff-related cost changes add additional layers of unpredictability at the shelf. Meanwhile, retailers are racing to maintain customer engagement and loyalty as rising prices and fierce competition make retention more challenging than ever.
But what does this all really mean? To better understand how this uncertainty translates into real-world shopping decisions, our team at InContext surveyed 14,132 U.S. grocery shoppers, asking how trade policy, price fluctuations, and government actions shape their choices.
The results paint a picture of rising concerns, including that tariffs will drive up the cost of household essentials, with many people citing that discounts and sales will guide their purchases.
Although this may seem discouraging, it reveals clear opportunities for retailers to adapt and respond. With up-to-date shopper data in hand, retailers can use technology such as virtual store simulations to set prices and react quickly, even when the broader economic climate is beyond their control.
As new policies take shape, one critical question emerges: How will loyalty be earned—through points and perks, or through transparent value that’s visible at every shelf?
Loyalty Programs vs. Value-Driven Pricing
Loyalty programs have long been a foundation of grocery customer retention, offering points, perks, and exclusive discounts in an attempt to keep shoppers coming back. Nearly 94% of consumers are enrolled in a supermarket loyalty program, with these members spending more and shopping more frequently than nonmembers. Engaged loyalty members have traditionally delivered measurable lifts in basket size and visit frequency, driving profitability for retailers.
However, loyalty programs also present points of customer dissatisfaction. Shoppers frequently cite frustrations such as complicated redemption rules and rewards that don’t feel meaningful. According to recent studies, 36% of consumers don’t understand how to earn or redeem rewards, and 44% have left a loyalty program because of a perceived lack of valuable deals. While rewards programs remain popular, loyalty is getting harder to earn. In fact, consumer engagement has actually dropped by 20% over the past two years, especially in grocery, where shopper expectations are high and patience for confusing programs is low. If retailers can’t deliver simplicity and clear value, they risk seeing even their most loyal customers walk away.
In contrast, value-driven, or value-added, pricing is gaining momentum. Instead of relying on cost-based or purely competitive models, this approach sets rates according to how much customers perceive a product is worth. This accounts for factors such as quality, relevance, and unique features, rather than just cost. The approach is designed to reflect what customers are willing to pay, aiming to build stronger relationships and loyalty through fair, transparent pricing.
Unfortunately, adoption for this isn’t always straightforward. Factors such as fear of losing price-sensitive segments and concerns about accurately gauging perceived value hold some businesses back. Done right, however, value-driven pricing can help retailers differentiate their brands and better connect with shopper expectations, especially when market volatility puts on added pressure.
So which is the better option? First, let’s take a look at the data.
What Our Study Reveals
Our 2025 Tariffs in the Aisles customer survey engaged 14,132 U.S. grocery shoppers—across every U.S. region and household type—to dig into how government trade policies affect the price of a product and shape everyday grocery habits.
Here’s what stands out among the numbers:
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- 67% of shoppers believe tariffs will affect grocery prices.
- 65% worry tariffs will drive up the cost of household essentials.
- 64% say discounts and sales now guide many of their purchase choices.
But these headline stats are just the beginning. By combining detailed customer surveys with virtual store simulations (which mirror real shopping trips with 96% real-world accuracy), our research tracked how consumers actually respond to price changes. This approach revealed deeper shifts in customer perceptions, customers’ willingness to pay, and value assessments in response to new competitor pricing and cost-based pricing.
Bulk buying and private-label preference
Tariffs and sharper competitor pricing strategies are driving lower- and middle-income consumers to consistently prioritize store brands and bulk formats to manage their grocery budgets. This behavior shift has led to a notable increase in private-label sales, as well as an increased focus on transparent, value-based pricing approaches. While cost savings are a primary motivator, it’s not just about finding the lowest price. When shoppers see similar products side by side, many choose private labels because of their perceived value, such as high-quality sourcing (a shift from previous perceptions). Ultimately, shoppers want the best mix of value and price, not simply the lowest shelf tag.
Rise of “economic patriotism”
An increasing number of shoppers now deliberately seek out U.S.-based retailers and locally made high-quality products. For these buyers, domestic sourcing signals trust and reliability, especially when market forces are in flux. That desire for unique value is powerful, even when lower prices are available on mass-produced or imported similar products.
Demand for transparency and communication
Our findings show customer perceptions around price are evolving. Every segment flagged the need for honest communication, including why prices are changing, what cost-based pricing means for their basket, and how retailers are working to protect value. Shoppers are more willing to pay, and stick with a brand, when they understand the “why” behind the price of a product and can see the retailer’s commitment to unique value and transparent pricing approaches. Clear messaging on shelf labels, especially about the value and origin of products, is now a major loyalty driver.
Turning Data into Retail Strategy
Gathering data is just the beginning. Turning those insights into action is what drives true sustainable growth. When you transform raw information into informed decisions, retailers can close the gap between customer needs and business outcomes, setting the stage for the loyalty initiative that follows. Here’s what you need to know.
Segment your audience for best pricing.
Analyze customer behavior and segment shoppers by their primary traits, including value-hunters and bulk buyers. Tailor your messaging and value-added pricing to match what each segment considers good value, whether it’s premium pricing, lower markups, or transparent communication on the value of a product.
Refine your pricing models and assortments.
Adapt your bulk models and private-label offerings to serve different customer segments: value shoppers may seek low-cost, high-volume options, while premium buyers are willing to pay more for transparent sourcing and organic quality. For example, organic items can command higher prices if buyers understand the story behind them and why they’re high-value compared to similar products.
Use technology to accelerate execution.
Tools such as InContext’s digital twin platform allows you to test multiple pricing approaches, simulate customer response to markups and premium prices, and fine-tune assortment strategy. And all of this happens in a fully interactive virtual store environment that mimics actual shopper behavior.
Create continuous feedback loops.
Regularly analyze basket size, promo responsiveness, and margin impact by audience segment. Respond quickly as tariffs or competition-based pricing trends shift, and adjust your strategy so you always deliver the best pricing for each target customer.
Turning Strategy into Action
Implementing a successful pricing strategy means putting data-driven insights into practice across every part of your business. Use the steps below to stay ahead of market trends and focus on delivering product value for each customer segment. For each buyer persona, identify their specific pain points and value expectations, then optimize your pricing and communications to maximize profit margin, whether you’re selling high-end products at a premium or aiming for the best value in more competitive categories.
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- Build detailed buyer personas to identify each target market’s pain points and expectations of value.
- Audit shopper data, segment customers by behavior, and use insights to offer different prices and experiences for premium and value-driven groups.
- Refine your private-label assortments, applying cost-plus pricing to ensure a healthy profit margin and transparency in pricing.
- Run virtual tests and simulate promotions to gauge customer response to higher price points and perceived value.
- Train teams to communicate what makes each product a good value, highlighting sourcing and premium features in higher-end categories.
- Continuously monitor market trends and feedback, adapting pricing and messaging to meet changing needs and maximize profit margin.
- Benchmark pricing and execution against your competition and industry leaders, using research and feedback to validate your strategies.
With a proactive approach, retailers can deliver best pricing and strengthen loyalty as market trends shift.
Redefining Customer Loyalty for the Future
The definition of loyalty in retail is always changing, but what’s clear is that punch cards, points, and one-off discounts aren’t enough to establish and reinforce it. Today loyalty is built through value alignment and the ability to adapt to what shoppers need now.
Customer loyalty depends on trust and transparency. Shoppers expect pricing and promotions to reflect fairness and quality instead of gimmicks. And meeting those expectations requires a modern value-based pricing strategy grounded in data and powered by technology.
By combining customer data, virtual testing, and clear value propositions, retailers can anticipate shopper behavior instead of reacting to it. Tools such as InContext’s virtual platform make it possible to test new pricing methods and validate strategies in a real-world virtual environment, turning market research into immediate action.
The future of retail loyalty lies in a balance of data and empathy. When you understand what drives customer needs and how pricing transparency sustains trust even when conditions change, you can start to build true loyalty.
Now is the moment to act. Download the full Tariffs in the Aisles report to see the data behind these insights, or connect with InContext to explore a pilot program tailored to your goals.
FAQ: Retail Pricing, Value, and Feedback
How should retailers determine the right price for a new product?
Start by understanding the value perceptions of your target customers. Use customer feedback, competitor benchmarks, and in-store or virtual testing to see what features or benefits justify different price points. Consider introducing the new product with value-added features—such as eco-friendly packaging, in-store sampling, bundled recipes, nutritional information, or loyalty program bonuses—and/or targeted promotions to gauge initial reception and set your metrics for success.
What metrics are most important for tracking the effectiveness of a value-based pricing strategy?
Look beyond basic sales figures to track profit margin by product, customer retention rates, and how customers perceive the value of the product. Key metrics include the percentage of customers choosing premium or value-added versions, changes in average transaction size, and recurring feedback about fairness and quality.
How can retailers use customer feedback to refine pricing?
Open channels for customer feedback on both price and perceived value. Use reviews, surveys, and focus groups to identify pain points, such as price resistance for new products or confusion about the benefits offered. Feedback can reveal when higher price points are justified or when changes in communication are needed to reinforce the value of a product.
How do value perceptions shape loyalty and long-term success?
When customers believe they’re getting good value, whether through quality, convenience, or fair pricing, they’re more likely to become loyal advocates. A strong value-based pricing approach adapts to changing perceptions and resets as new competitor offerings or customer needs emerge.
What’s the best way to benchmark pricing strategies against the competition?
Regularly analyze competitor pricing, customer reviews, and emerging market trends. Use virtual environments to test your own prices and promotional strategies so that you can make adjustments in response to feedback or shifting value perceptions in your target market.
