Mexican shoppers prove loyal to brands

MEXICO CITY: Consumers in Mexico have displayed considerably greater brand loyalty than their American counterparts since the onset of the financial crisis, a study by McKinsey has revealed.

The consultancy polled 2,200 shoppers from Mexico and 1,000 from America, and found 70% of the former audience had trimmed their spending after the downturn began, versus 45% of the latter.

A further 66% of Mexicans had reduced the amount they ate out, versus 47% in the US. These figures hit 63% and 43% for ordering fewer take-aways, and 60% and 34% for cutting prepared food purchases.

Looking at the food sector, 25% of respondents in Mexico would prefer to buy branded products less often than trade down. Of this group, just 4% had switched to cheaper items in the last 12 months.

As an example, just 6% of Mexicans had opted for more affordable carbonated beverages in this period, and 3% had turned to lower-priced rice. Their US peers recorded 13% in both areas. 

Only 2% of Mexicans followed this path when buying canned vegetables, cookies and pasta, falling to 1% for frozen dinners. The American panel posted double-digit scores in all of these segments.

An equally modest 1% of people in Mexico had traded down in the candy market, with the US logging returns of 8%. The gap closed to 5% and 7% when discussing beer.

"The food category exemplifies how Mexican consumers have, overall, remained loyal to their brands," McKinsey's study argued.

Among the Mexican shoppers that did shift to cheaper lines, roughly 20% selected store brands, even though private label lines account for a comparatively limited 5% of local retail sales.

This can be measured against a market share of 17% in the US, which itself lags significantly behind European countries like the UK on 43% and Spain on 31%.

However, over 90% of customers in Mexico who did trade down said their expectations were "exceeded", a statement holding true for 54% of Americans. Some 46% of Mexicans engaging in this activity also had "no intention" of returning to national brands.

Elsewhere, 15% of people in Mexico had changed where they shopped for reasons linked to price or convenience. This is part of a longer term trend, as traditional retailers saw their market share fall from 37% to 32% between 2009 and 2011.

Data sourced from McKinsey; additional content by Warc staff, 17 August 2012

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