Co-op to revive the 'divi' money-back scheme

THE Co-op divi, familiar to generations of shoppers in the 1950s and 1960s, is about to make a comeback in a new high-tech form as the Co-op retail chain, still Britain's largest, hits back at Tesco's successful Clubcard and Sainsbury's copycat Savacard.

As Asda last week announced that it was testing its own loyalty card, the move by the Co-op looks set to intensify competition among the country's giant retailers.

The Co-op divi, calculated by hand on the basis of every customer's spending on groceries, and paid out in shillings and pence on every dividend payment day - on production of a personal customer number - was something every prudent shopper could look forward to until 1968.

Then it was abolished in all but a few areas, in favour of Co-op stamps - which were themselves later abandoned as profits declined.

The divi was part of the commitment by the Co-operative movement, whose roots lie in 19th century working-class self help, to sharing profits among its customers.

Its return apparently reflects the success of businesses such as the Co-operative Bank in using ethical commitments to give themselves a distinctive market position.

Geoff Simpson, public affairs manager of the Co-op Wholesale Society, said last week: "CWS is looking at an experimental scheme for later this year. Details are not yet finalised. We would have preferred not to have said anything so far." The relaunch of the divi is also being seen as a response to the success of Tesco's loyalty scheme, which has attracted five million members in as many months, although the societies deny that there is a connection.

The CWS may even go one step beyond Tesco, which uses a magnetic stripe on its Club Card to accumulate centrally two points, worth 5p each, for every pounds 10 spent, and then sends out money-off vouchers by post.

Some small Co-op societies such as the Chelmsford Star are already paying divis using smart card technology, where the calculations are entered onto the card itself, enabling shoppers to claim their divi at any checkout as soon as they are entitled.

Sainsbury's chairman David Sainsbury initially dismissed loyalty schemes as "electronic Green Shield stamps". But now both Sainsbury and Safeway have similar schemes.