Essay Tesco

5235 Words May 16th, 2013 21 Pages 17/03/13 11.52am
The card up their sleeve
It sounds good - loyalty cards entitle us to freebies or cash simply for shopping at our local superstore. Of course, retailers get something in return: a heap of information about us we might prefer them not to know. That's before they get started on the new tags that track you and what you buy. Rachel Shabi investigates

Every time you reach the checkout in the two biggest supermarket chains, it's the same question: have you got a card? It can get irritating, but nonetheless we have willingly signed up to their reward schemes - in droves. According to market researchers TNS, around 85% of UK households have at least one
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British retail, especially supermarket retail, is among the most competitive on the planet. Merlin Stone, business research leader at IBM, explains: "Grocery retailing in the UK is a classic oligopoly, with the top three or four firms accounting for around 60% of the market." Those companies are fighting for an overall UK grocery spend of £65bn a year. In such a fierce climate, there's a constant search for smart weapons to gain an edge.
Enter the loyalty scheme, beginning with the Tesco Clubcard introduced in 1995. One year later, Clubcard holders were spending 28% more at Tesco and 16% less in arch-rival Sainsbury's. The latter soon followed suit with its Reward card, launched the same year and with a membership of 10m by 1998. Safeway introduced its version, the ABC card, in 1995 - although this was ditched in 2000 - and Boots rolled out the Advantage card in 1997. Scores of other operators - Barclaycard, BP, Shell, WHSmith - developed similar schemes and then, in September 2002, Air Miles founder Keith Mills introduced the consortium concept that is the Nectar card. With heavyweight companies such as Sainsbury's, BP, Debenhams and Barclaycard among its members, the Nectar scheme was thrust upon us with the biggest advertising campaign since the National Lottery, costing a reported £50m. By February this year, Nectar had signed up 11m UK households (out of a total of 22m).

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