Loyalty cards don't work, claims new study
lowest prices rather than gimmicks such as loyalty card schemes,
according to Asda citing data from a new survey from NOP. Not what
Sainsbury wanted to hear as it launches its new loyalty scheme this
week.
In the week when the UK's number two supermarket group Sainsbury launched its new loyalty card scheme, rival chain Asda has unveiled new research from NOP which it claims shows that such schemes do not work and that shoppers want lower prices, not bonus points.
Asda, which is the third-largest supermarket group in the UK and which has stoically opted for lower prices than marketing 'gimmicks' such as loyalty cards, said that the NOP survey, carried out at the start of the month, showed that 93 per cent of shoppers preferred to pay less for their groceries than earn points on their purchases.
"Shoppers know there's no such thing as a 'free lunch' and that loyalty cards are strongly suspected of pushing up prices," Asda said in a statement. "People have not warmed to loyalty cards in the last few years, with almost three-quarters (73 per cent) saying their attitude to them has not changed."
But perhaps the most interesting finding, one which Asda urged its rivals Tesco and Sainsbury to take on board, was the fact loyalty cards do not, apparently, engender loyalty of any sort among consumers, with most either having cards from a variety of stores or simply shopping at whichever store they prefer, whether it has a loyalty scheme or not.
Asda also cited data from analysts Taylor Nelson Sofres which shows that sales growth at companies such as Asda and Morrisons - neither which have ever gone down the loyalty card route - has outpaced that of both Tesco and Sainsbury by 10 per cent over the last two years.
The NOP survey showed that 45-54 year olds were the most sceptical about loyalty cards with over three quarters (76 per cent) agreeing it they made little difference to where they shopped. When asked, 93 per cent of Sainsbury shoppers and 95 per cent of Tesco shoppers said they would choose lower prices over loyalty cards, Asda said.
Asda piloted a loyalty card scheme in the late 1990s but scrapped it after a brief pilot. It claims to have reduced prices almost every week since then, and will this year spend some £200 million (€318m) on pushing down its prices, money which it claims would have been wasted on a loyalty scheme.
"Customers aren't fooled by marketing gimmicks," said Asda's deputy chief operating officer Richard Baker. "Shoppers' real loyalty only comes from offering the lowest prices on the right range of products."
The latest figures from Taylor Nelson Sofres show that Asda is Britain's fastest-growing retailer. According to its Till Roll analysis for the 12 weeks to 18 August 2002, Asda had a market share of 15.9 per cent of all grocers, with sales up by 11 per cent on the previous year.
