Family grocery shopping and looking at school supplies

What The Cost-Of-Living Crisis Means For CPG Loyalty

CPGArticle

February 04, 2026

The cost-of-living crisis continues to impact consumers globally – and as summer approaches, many are likely to feel that pressure grow. For families, in particular, what should be a season of fun and enjoyment can quickly become a period of heightened financial strain – with additional childcare, summer camp and clubs, and the inevitable extra spending on days out, activities, entertainment, and travel.

These seasonal pressures do more than stretch household budgets – they risk reshaping entire purchasing decisions. For CPG brands operating in a high-volume, low-margin environment, there are significant implications.

When budgets are tightened, customer loyalty is tested. So, is there a real danger that shoppers will just follow the discounts? Or could the economic backdrop help deepen consumers’ emotional connection to brands this summer?

Loyalty under pressure

Our CPG research reveals that loyalty is consistently influencing consumer behaviors – but there are limits.

While 90% of grocery shoppers say they’re loyal to a particular brand, 68% admit switching due to a reward-based promotion. And notably, 87.5% would consider switching for a reward over a discount.

In the summer months – when consumers are managing the increased responsibility and cost of keeping kids entertained, active, and engaged, or getting out more to spend time with friends and family – the temptation is to offer a discount to ease the financial burden.

But what if a brand’s rewards could help solve the wider challenge consumers are facing: creating meaningful, affordable memories during an already expensive season?

The dangers of discount dependency

Leaning too heavily on discounts is a risky strategy. Not only does it erode margin in an already tight category, but it also conditions consumers to expect price reductions from the brands offering these cuts. Over time, this weakens brand equity and makes it increasingly difficult to differentiate on anything other than price.

This risk gets exponentially higher during peak periods. Competitors are all fighting for attention with similar tactics, leading to a race to the bottom that doesn't benefit brands or shoppers in the long term.

Value vs. cost

There's another problem that discounting reliance brings to light: value and cost are two very different things.

As we explored in our previous blog on the value multiplier, consumers don’t make decisions based purely on price. Instead, they assess what they gain, relative to what they spend. It’s an important distinction: while a discount reduces overall cost, it doesn’t necessarily increase perceived value. On the other hand, a well-designed reward – especially one that delivers a highly-sought-after experience – can drastically elevate the overall position.

And as a result, the consumer’s decision framework shifts from price vs. quality to value vs. cost.

Turning everyday purchases into summer experiences

Summer is the perfect time for brands to tap into experiential value. Consumers are actively looking for ways to fill time and create memories – often while juggling financial constraints. Brands that can help alleviate some of that load will make a lasting impression.

By offering access to days out, activities, dining rewards, and family experiences, brands can transform everyday purchases into something much more meaningful: moments that last long after checkout.

This is where TLC’s global rewards network shines.

When Entenmann’s needed a way to reward their loyal brand fans while attracting a new generation of consumers, they needed the right rewards for both audiences. They found the sweet spot by offering a choice of rewards with the purchase of promotionally marked boxes of donuts: a National Days Out Pass (our proprietary reward including family-friendly activities like mini golf, roller skating, and zoo visits); a $20 live event credit, or 1 free movie rental. With a gamification sweepstakes element giving consumers a chance to win a trip for 4 to Orlando, the campaign led to a 13% sales uplift and 150,000+ game plays. The product remained the same, but the perceived value increased dramatically – and so did brand awareness, engagement, and purchasing behavior.
Across the pond, during peak cost-of-living pressure in the UK, Birds Eye chose not to compete on price. Instead, they offered free family activities worth £20+ with every purchase. This directly addressed the cost implications of keeping kids active during school breaks and leaned into the brand’s identity as a household favorite. The campaign delivered a 9% sales uplift while strengthening emotional connections with families by adding levity during a difficult time.
A complementary campaign extended this further, offering free Hasbro games to encourage family time at home. With over £2.1 million in rewards claimed and redemption rates triple the industry norm, this initiative demonstrated how powerful shared experiences can be in driving both sales and brand affinity.
Already positioned as a price leader, ALDI didn’t need to discount products any further. Instead, it enhanced its proposition by offering free sports sessions in the lead-up to the Olympics. Over 200,000 sessions were claimed, reinforcing brand engagement while supporting consumers during a financially challenging time, when all eyes were on competitive sports.

These campaigns are a powerful reminder that the most effective loyalty strategies engage three core drivers:

The head - rational value and utility.
The wallet - financial benefit.
The heart - emotional connection.

Discounts primarily target the wallet. But in isolation, they're rarely enough to build lasting loyalty.

Meanwhile, experiential rewards, on the other hand, operate across all three areas.

They justify the purchase rationally (head).
They offer tangible financial value (wallet).
And, they create meaningful, memorable experiences (heart).

The silver lining

Cost-of-living crises come with a lot of challenges. Shoppers are more cost-sensitive and willing to switch brands, but they’re also more open to genuine, relevant value delivered at the right time.

While brands continue to compete on price, the ones that invest in experience-led rewards can differentiate in a commercially sustainable and emotionally resonant way during peak season.

TLC combines deep behavioral insight with a global network of rewards to help brands create campaigns that drive acquisition, increase engagement, and build lasting connections with audiences across every season.

Are you ready

to rethink your strategy this summer and beyond?

Let’s get started

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