High street giants unite loyalty cards

Shoppers will be able to amass loyalty-card points at four of the UK's biggest high street names under a new customer reward initiative to be launched this autumn by the founder of Air Miles.

The joint loyalty programme, which will initially be offered by J Sainsbury, BP, Debenhams and Barclaycard, is the first attempt by retailers to revive their customers' attitudes to reward schemes.

The Nectar scheme is expected to sign up half of all UK households within a month of its launch this autumn. It will be the largest of its kind in the UK based on the number of subscribers to the four companies' existing schemes. Shoppers will be able to earn points at more than 1,800 outlets as well as on Barclaycard purchases.

Keith Mills, who sold the Air Miles business in the UK to British Airways in 1994, will run the programme in return for a fee from each of the participants. "We will act as a clearing house taking cash from our partners to buy rewards for consumers," Mr Mills said. Loyalty Management International, which is chaired by Mr Mills, will spend more than £500m on rewards such as flights, cinema tickets, holidays and restaurant meals over the next three years.

Sir Peter Davies, the Sainsbury's chief executive, said the supermarket group had been attracted by the prospect of luring new customers into its stores. "[Nectar] offers [our customers] a huge opportunity to earn more points in a range of complementary retail outlets," he said. It will also allow the participants to paint a clearer profile of their customers and their buying habits.

A BP spokesman said the oil giant expected the scheme to boost sales by at least 5 per cent. "Anything you can do to improve your offer helps," he said.

The Nectar scheme is intended to refresh shoppers' enthusiasm for reward cards by enabling them to accumulate points more quickly. "It will be faster and simpler than anything out there," a Sainsbury spokeswoman added.

The move comes a week after Sainsbury's admitted that its decision to abandon its Air Miles scheme, which was picked up by its rival Tesco, had contributed to the slowdown in its sales growth. The supermarket chain decided to drop the initiative last March as part of its preparations to adopt Nectar.

Several retail groups, including Safeway and Asda, have axed their reward schemes in the past few years in favour of ploughing the costs of running them into lower prices.

Mr Mills said Nectar would add "many more" retailers over the next year in sectors ranging from mobile phone operators to do-it-yourself.