Why grocery loyalty programs sometimes struggle to change behavior

Loyalty still earns its place in grocery. A program that brings a shopper back week after week is worth real money in a business built on frequency. The catch is that nearly every grocer now runs the same toolkit (a program, digital coupons, an app, personalized offers), so a loyalty card has become something shoppers expect rather than a reason to choose one store.

That's the pattern at the center of Escaping the Loyalty Plateau, Upside's 2026 study of more than 12,000 consumers and retailers across fuel, grocery, and restaurant. Grocery has the highest membership rates of any category and the lowest influence per member. Sign-ups keep coming while the behavior behind them barely moves.

Growing the member base has never been easier. Moving the shoppers who haven't truly committed is the opportunity now.

A loyalty card rarely changes where shoppers spend

Grocery has more loyalty members than any other retail category, and gets less out of each one. Shoppers sign up at the register without a second thought, carry a card for every chain they pass, and grow a little more selective with each one they add. Of the major categories in Upside's research, grocery posts the lowest net influence score, the measure of how much a program actually changes what members buy. It moves behavior well under half the time. That gap, plenty of members and little movement, is the loyalty plateau the report is named for.

When a card is that easy to get and that common, having one stops meaning much. In grocery, loyalty has become part of the price of doing business, something shoppers expect rather than a reason to pick one store over the next. What actually moves a trip is value a shopper finds genuinely relevant, and that is harder to earn than a sign-up.

A full loyalty file doesn't fill a cart.

Most members could be moved if a program tried

Most grocery shoppers are persuadable, which is the most useful thing they could be. They like several stores, respond to a relevant offer, and haven't locked onto a single default. Upside's research has a name for the largest group of them: the preference-first shopper. They carry real brand affinity and real price sensitivity at once, use programs actively, and move when an offer is relevant. In grocery, they are the majority.

They are also the shoppers a program built for the average serves worst. Rounded into one undifferentiated crowd, the segment with the most behavior left to shape gets treated like everyone else. That is the opening: the largest, most movable group in the store, sitting mostly untouched.

The biggest opportunity in grocery is the shopper an average program keeps missing.

Personalized value beats a blanket discount

Breaking out doesn't take a bigger discount budget. As promotional pressure rises, grocers are right to be wary of blanket deals, of paying shoppers who were already coming in, and of the margin erosion that follows. Loyalty was built to influence choice in a margin-preserving way, and rewarding a trip that was already happening was never the point.

The real lift is reach. A loyalty program, however sharp, only works the shoppers already in a grocer's orbit, and the plateau is full of the ones it never touches. A marketplace closes that gap. It meets shoppers out in their everyday routine, outside any single grocer's app, and puts a store in front of the uncommitted shopper before they've decided where this week's trip is going. That early moment, before the cart starts filling, is one a loyalty program rarely gets to shape.

Paired with sharper, personalized offers, a marketplace turns relevance into reach, and the retention data follows. Across billions of transactions through Upside, retailers in a marketplace hold onto customers better than those running a program alone. Loyalty and Upside each cut churn independently, and together they cut a customer's first-month churn by more than 30 percentage points, without leaning harder on margin.

Standing out when every program looks alike

When every competitor offers a similar program, standing out comes from how many shoppers a grocer can actually move. Sharper value deepens the persuadable shoppers a store already has, and a marketplace reaches the ones it doesn't. That is how a grocery program grows from a card in the wallet into a reason to choose the store.

Download the full report with more data