Tesco's £67m payout to Clubcard users steps up pressure on rivals

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The Independent Online

Tesco HAS stepped up the pressure on its rivals by mailing out of £67m of Clubcard vouchers to customers in a surprise pre-Christmas move.

It is the first time since the loyalty card scheme was launched in 1995 that Britain's biggest grocer has sent out a large chunk of its rewards, usually due in February, before the festive season. Tesco said it had returned more than £529m in cash-equivalent Clubcard vouchers this year. Carolyn Bradley, the company's UK marketing director, said: "It is basically a bonus for customers so they get rewarded early in time for Christmas. It's a nice surprise."

Tesco's Clubcard salvo came on the same day that the Co-operative Group – the UK's fifth-largest grocer after it acquired Somerfield this year – said it would offer customers £200m in savings, including its first triple Co-op dividend. Last month, Tesco and Asda promised their customers pre-Christmas savings of £250m and £150m, respectively.

Tesco said the £67m mailout was made possible after it launched a double reward points promotion in August, dubbed Clubcard2, because shoppers had been earning points twice as fast as last year. Tesco customers can use the vouchers for Christmas shopping or hold on to them until they receive a Clubcard statement in February.

Dave McCarthy, a retail analyst at Evolution, said: "I think it is a good move. It is putting customers first and giving them something back when they need it the most."

There is a degree of scepticism in the grocery undustry about so-called price wars and if the cuts promised by the major supermarkets genuine. But Mr McCarthy said: "Tesco is giving back £67m to customers this year that it didn't last year."

Of the big four grocers, Sainsbury's is the only other one with a loyalty card programme, Nectar. Neither Asda nor Morrisons have such a scheme.

Jonathan Pritchard, of Oriel Securities, said: "We continue to believe that Clubcard is the most potent weapon in the battle for customer loyalty: we certainly believe Morrisons and Asda are missing a trick by eschewing a card."

Last month, Sainsbury's began its first Christmas television ad campaign to remind customers to spend unused Nectar loyalty points. It also offers "money-off coupons" at tills for hundreds of products. Mr McCarthy said: "You have more loyalty-based activities in the market. So-called price wars are one dimensional. What you have got at the moment is more of a loyalty war where [stores] are trying to cement shoppers in in order to get a bigger share of each shopper's total expenditure."

Separately yesterday, Tesco revealed that Sir Terry Leahy, its chief executive, made £2.24m on the sale of share options last Friday.