Why Are You Not On This List? Amazon, Walmart, Kroger and Starbucks Continue Winning the Loyalty Battle

 

The latest loyalty rankings should serve as a wake-up call for every restaurant, grocery retailer, convenience store operator, and foodservice executive in America.

The real question is not why Amazon, Walmart, Kroger, Costco, CVS, and Starbucks made the list.

The question is:

Why are you not on it?

According to new research from LoyaltyLion, 91% of consumers say loyalty programs influence repeat purchases. That number alone should capture the attention of every food retailer and restaurant executive in the country. In an era where customer acquisition costs continue to rise and consumers remain cautious about discretionary spending, retaining existing customers has become more valuable than ever.

The study found that consumers log into loyalty accounts an average of 11 times per month, while 15% engage daily. Among younger consumers ages 16-24, fully 80% engage with loyalty programs at least weekly.

That level of engagement would make most social media marketers jealous.

Loyalty Has Become a Daily Habit

Today's consumers are not simply looking for discounts. They are looking for value, convenience, recognition, and personalization.

That is exactly why the most successful food retailers and restaurant brands have evolved beyond the traditional "buy 10, get one free" model.

Consumers increasingly expect:

·       Personalized offers

·       Digital convenience

·       Mobile ordering

·       Exclusive member pricing

·       Faster service

·       Better experiences

·       Relevant recommendations

·       Community engagement

In fact, industry research consistently shows that acquiring a new customer can cost five to seven times more than retaining an existing one. Loyalty programs have become one of the most efficient ways to increase visit frequency, basket size, and customer lifetime value.

Foodservice Operators Should Pay Attention

While Amazon, Walmart, Kroger, Costco, and Starbucks dominate loyalty rankings, foodservice operators should recognize a larger trend.

Consumers no longer separate grocery stores from restaurants the way they once did.

The modern consumer shops across channels.

A shopper may:

·       Order Starbucks before work

·       Pick up lunch at a quick-service restaurant

·       Purchase dinner from a grocery store service deli

·       Buy snacks at a convenience store

·       Order delivery later that evening

Winning loyalty means winning multiple eating occasions throughout the day.

The battle is no longer store versus store.

It is meal occasion versus meal occasion.

That is why grocerants, Ready-2-Eat meals, Heat-N-Eat solutions, meal bundles, and fresh prepared foods continue gaining relevance. Consumers increasingly seek convenient meal solutions that save time while delivering quality and value.

The Top 10 Most-Valued Loyalty Programs

According to the LoyaltyLion survey, America's most valued loyalty programs are:

1.       Amazon (including Prime)

2.       Walmart (including Walmart+)

3.       Kroger

4.       CVS

5.       Starbucks

6.       Costco

7.       Kohl's

8.       Sephora

9.       Target Circle

10.   Ulta

Notice something interesting?

Consumers interact with these brands frequently.

Very frequently.

The more often consumers engage with a brand, the more opportunities that brand has to reinforce value, trust, and habit.

Frequency drives familiarity.

Familiarity drives preference.

Preference drives loyalty.

Loyalty drives profits.

Economic Pressure Is Fueling Loyalty Growth

Consumers remain focused on stretching their household budgets.

More than half of survey respondents indicated economic uncertainty makes them more likely to join loyalty programs.

That finding aligns with broader food industry trends.

Consumers continue searching for:

·       Everyday value

·       Meal deals

·       Bundled offers

·       Member pricing

·       Subscription savings

·       Convenience without sacrificing quality

Warehouse clubs such as Costco and Sam's Club continue benefiting from this trend because shoppers increasingly view memberships as a way to control food spending while maximizing value.

The same principle applies to restaurants and grocerants.

Customers want predictable value.

When they find it, they return.

Loyalty Is Becoming Emotional

Perhaps the most important finding in the report is that 55% of consumers say they feel more connected to a brand after joining a loyalty program.

Another 60% report a better overall customer experience.

This highlights an important shift.

Loyalty is no longer purely transactional.

It is increasingly emotional.

Consumers want to feel recognized.

They want relevance.

They want simplicity.

They want brands that make their lives easier.

The strongest loyalty programs create relationships, not merely transactions.

That explains why local retailers, breweries, fitness centers, and independent businesses also earned significant consumer recognition in the survey.

Consumers reward brands that consistently deliver on expectations.

The New Loyalty Formula

The food industry often overcomplicates loyalty.

Consumers have actually made it quite simple.

They reward brands that consistently deliver:

·       Good food

·       Fair prices

·       Fast service

·       Reliable quality

·       Convenient access

·       Positive experiences

Technology may facilitate loyalty, but operational excellence creates it.

A mobile app cannot fix poor food quality.

A rewards program cannot overcome inconsistent execution.

A discount cannot compensate for bad service.

The brands winning today understand that loyalty begins long before points are awarded.

It starts with delivering value every single day.

Four Grocerant Guru® Insights

1. Service Is the First Loyalty Program

Consumers remember how they are treated long after they forget how many points they earned. Friendly, efficient, reliable service remains the foundation of repeat business.

2. Price Creates Trial, Quality Creates Repeat Purchases

Value attracts customers the first time. Consistently high-quality food and products determine whether they return the second, third, and tenth time.

3. Brand Consistency Builds Trust

Consumers reward brands that deliver the same experience every visit. Consistency reduces purchase risk and strengthens confidence in the brand.

4. Service + Price + Food Quality = Long-Term Loyalty

The brands that win over time are not necessarily those with the biggest loyalty programs. They are the brands that consistently execute the fundamentals. When service, price, and food quality align with brand expectations, loyalty becomes a natural outcome rather than a marketing promotion.

At Foodservice Solutions®, we continue to find that consumers vote with their wallets every day. Loyalty programs may encourage engagement, but sustainable growth comes from delivering a consistently superior experience. In today's competitive food marketplace, loyalty is earned one meal, one visit, and one positive experience at a time.

Gain a Competitive Edge with a Grocerant ScoreCard

Unlock new opportunities with a Grocerant ScoreCard, designed to optimize product positioning, placement, and consumer engagement.

Since 1991, Foodservice Solutions® has been the global leader in the Grocerant niche—helping brands identify high-growth strategies that resonate with modern consumers.

Call 253-759-7869 or Email Steve@FoodserviceSolutions.us

Lawsuit Highlights Growing Pains in Grocery Foodservice as Retailers Expand Restaurant-Like Experiences

 

For more than three decades, the Grocerant Guru® has tracked the evolution of fresh prepared foods inside grocery stores. What began with simple deli counters has transformed into sophisticated restaurant-quality foodservice platforms featuring sushi bars, pizza stations, burrito shops, coffee concepts, barbecue counters, poke bowls, Asian cuisine, and chef-driven meal solutions according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Today, grocery stores are no longer simply competing with other grocers. They compete directly with quick-service restaurants, fast-casual chains, convenience stores, meal delivery providers, and increasingly with consumers' own freezers through what I call "The Frozen Food Court."

That evolution makes a recently filed lawsuit by the San Diego County Office of Labor Standards and Enforcement particularly noteworthy for the entire food retail industry.

The Lawsuit

San Diego County has filed suit against several companies operating sushi concepts inside supermarkets, including Ace Sushi Franchise Corp., Advanced Fresh Concepts Franchise Corp., and FujiSan Franchising. The complaint alleges that sushi chefs working inside grocery stores were improperly classified as independent contractor franchisees rather than employees.

According to the lawsuit, some sushi operators reportedly worked 50 to 70 hours per week while paying various franchise fees, equipment rental charges, ingredient costs, financing fees, and other expenses. The county contends these arrangements enabled operators to avoid labor obligations including minimum wage requirements, overtime compensation, paid sick leave, workers' compensation coverage, unemployment insurance contributions, and mandated meal and rest periods.

The allegations remain claims at this stage, and the companies have not publicly responded through court filings. Nonetheless, the case raises broader questions about the operational models increasingly used throughout grocery foodservice.

Grocery Stores Have Become Restaurants Fighting for Share of Stomach 

Consumers have fundamentally changed how they purchase meals.

According to FMI, Circana, and multiple foodservice studies, convenience, value, portability, and immediate consumption have become primary drivers of food purchasing decisions. Shoppers increasingly enter grocery stores not merely to buy ingredients but to purchase complete meal solutions.

That shift has led retailers to aggressively expand foodservice offerings.

Today consumers routinely find:

·       Sushi counters

·       Pizza stations

·       Fresh sandwich shops

·       Salad bars

·       Mexican food concepts

·       Asian food kiosks

·       Coffee bars

·       Rotisserie chicken programs

·       Ready-2-Eat meal platforms

·       Heat-N-Eat family meals

Many grocery retailers now generate some of their strongest traffic and margins through prepared foods rather than traditional center-store grocery categories.

Restaurant Brands Are Moving Into Grocery Stores

The convergence between restaurants and grocery stores continues accelerating.

Restaurant chains increasingly view grocery stores as alternative distribution platforms capable of generating incremental sales without building new freestanding locations.

Examples include:

·       Starbucks locations inside supermarkets.

·       Krispy Kreme distribution through grocery channels.

·       Pizza Hut express concepts in retail locations.

·       Subway operating inside grocery stores and mass merchants.

·       Auntie Anne's and other snack concepts integrated into retail environments.

Meanwhile retailers themselves are creating restaurant-like brands.

Companies such as Kroger, Albertsons, Wegmans, H-E-B, and Hy-Vee have invested heavily in fresh prepared foods, often rivaling traditional restaurant offerings.

The result is a marketplace where consumers increasingly make dining decisions inside a grocery store rather than a restaurant parking lot.

The Labor Challenge Behind Foodservice Growth

The lawsuit illustrates a challenge that extends far beyond sushi.

Prepared foods require highly skilled labor. Whether preparing sushi, barbecue, pizza, fresh sandwiches, poke bowls, or hot meals, retailers face rising labor costs, labor shortages, training expenses, and food safety requirements.

To address these challenges, many retailers partner with third-party operators, branded concepts, franchise organizations, or licensed foodservice providers.

Such partnerships can create efficiencies and consumer choice. However, they also create complexity around employment relationships, operating control, liability, compliance, and profitability.

As grocery stores continue expanding foodservice operations, regulators will likely scrutinize these arrangements more closely.

Enter the Frozen Food Court

At the same time, another competitor is gaining strength.

The Grocerant Guru® has long referred to the frozen food aisle as "The Frozen Food Court."

Today's frozen food offerings bear little resemblance to those of twenty years ago.

Consumers can now purchase restaurant-quality:

·       Asian entrées

·       Sushi-inspired bowls

·       Pizza

·       Mexican meals

·       Breakfast sandwiches

·       Chicken products

·       Pasta dishes

·       Family-size meal kits

Advances in freezing technology, packaging innovation, ingredient quality, and microwave performance have significantly improved consumer acceptance.

Many frozen meal solutions now compete directly with prepared foods departments on:

·       Convenience

·       Value

·       Consistency

·       Portion control

·       Speed of preparation

For budget-conscious consumers, frozen meals often provide a compelling alternative to restaurant takeout and freshly prepared grocery meals.

Why This Matters

The San Diego lawsuit is about more than sushi counters.

It reflects the growing complexity of food retail's transformation into a foodservice business.

As grocery retailers seek higher-margin prepared foods sales, they must balance:

·       Labor compliance

·       Operational efficiency

·       Franchise relationships

·       Food safety standards

·       Consumer expectations

·       Profitability goals

Meanwhile consumers continue rewarding operators that deliver what matters most:

Quality + Convenience + Value + Portability + Trust

The retailers and foodservice operators that successfully align those elements will continue gaining market share. Those that fail to properly manage labor practices, operating structures, or consumer expectations may face increasing scrutiny from regulators, employees, and consumers alike.

Three Grocerant Guru® Insights

1.       The future of grocery growth remains in fresh prepared foods. Consumers increasingly shop for complete meal solutions rather than ingredients alone.

2.       Restaurant brands inside grocery stores will continue expanding. Retailers need differentiated foodservice experiences to drive traffic, increase dwell time, and improve margins.

3.       The Frozen Food Court will remain a formidable competitor. As frozen meal quality improves and consumers seek greater value, retailers must clearly demonstrate why fresh prepared foods justify their premium pricing.

The convergence of restaurants, grocery stores, convenience stores, and frozen foods is accelerating. The San Diego lawsuit serves as a reminder that while foodservice innovation creates opportunity, sustainable growth requires operational models that work for retailers, operators, employees, and consumers alike.

Tap into the Foodservice Solutions® team for greater understanding of New Electricity or for a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869