Safeway ditches customer loyalty scheme

The days of the supermarket loyalty card could be numbered after a decision by Safeway yesterday to scrap its ABC card in favour of lower prices.

Safeway, Britain's fourth-biggest supermarket group, said it believed shoppers were tired of loyalty points and vouchers and preferred product offers and across-the-board lower prices.

"We are saying the loyalty card has had its day," said Simon Laffin, Safeway's finance director. "We are throwing down a challenge to the others. We don't really think these cards work."

However, rival supermarkets immediately defended their cards. J Sainsbury said it was "definitely not" going to end its Reward card scheme which was launched in 1996. It is receiving 40,000 new applications every week, it said.

Tesco, whose Clubcard has 10 million holders, said it would take advantage of Safeway's decision by printing a further two million Tesco cards to fill the void. "People do like loyalty cards. We believe Safeway has dropped a clanger," said Richard Brasher, the company's marketing director.

To replace its card, Safeway plans to offer 30 to 40 price cuts every week varying from store to store. This week's offers include Kellogg's Cornflakes, down to 45p from 99p, and Pepsi-Cola, to 49p from £1.35. The deals will be promoted locally rather than by television advertisements.

Safeway admitted it would lose money on the offers, but said it needed to attract more customers on top of the 750,000 it claims to have enticed since last October. No new ABC points will be issued after 1 June, though customers will be able to redeem points until 30 September.