Sainsbury’s Ramps Up Loyalty Battle As Tesco Reduces Clubcard Value

The U.K’s second largest grocery chain is to go head-to-head with its biggest rival after announcing a pricing-saving loyalty initiative.

Sainsbury’s today introduced ‘Nectar Prices’, a new scheme that it is promising will give all 18 million Nectar customers large savings across a wide range of products, when checking out in Sainsbury’s supermarkets or online.

It also means Sainsbury’s and Tesco are in a direct battle of the loyalty cards after the latter’s decision to switch focus from its Clubcard discounts.

Customers shopping in Sainsbury’s supermarkets or online will get discounts on over 300 items initially, spanning household products, pet food and candy, with Nectar Prices, when using the Nectar app or card at checkout.

That means it will follow the same system as Tesco’s Clubcard, which offers holders significant discounts on many products.

Sainsbury’s said that Nectar Prices will also expand into more categories, with some items at half price.

Sainbury’s highlighted Ariel All-in-1 pods washing liquid capsules original (39 washes), £5 ($6.20) normally £10.50 ($13); 24 x 330ml Coke Zero, £5 normally £10; Nescafé Gold Blend coffee 200g, £4 normally £8.10; and Oral-B Pro 3 3500 Cross Action Black & Travel Case, £45 normally £100.

Sainsbury’s said that in launching the new scheme it will be the only retailer to offer the combination of lower prices for every loyalty customer through Nectar Prices and extra personalized discounts with Your Nectar Prices — previously My Nectar Prices — providing customers who use SmartShop with lower prices on items they buy regularly.

Sainsbury’s Pushes Nectar Value

In December 2022, Nectar issued its 1 trillionth point — meaning over $6.2 billion worth of points have been issued to Nectar users over the last 20 years — and last year nearly $275 million worth of points were issued.

Customers have had the option to either spend these on their food shopping, save them or exchange them for rewards across Nectar partners.

Additionally, customers can still collect Nectar points with over 350 retailers including eBay, gas retailer Esso and general merchandiser Argos.

“There is much more to look forward to, we will keep refreshing Nectar Prices and increasing the variety of products on offer,” Simon Roberts, Chief Executive Officer at Sainsbury’s, said. “It gets better, Nectar customers who shop in store with SmartShop will receive extra personalized value with Your Nectar Prices, bringing them the best prices on their favourite products.”

In December 2022, the retailer announced it was accelerating its value plan by investing a further $62.5 million in keeping prices low — a move which means that by March 2023 it has invested over $680 million in price reductions, notably its Aldi Price Match.

Loyalty Card Battle Heats Up

Loyalty cards have become a key battleground for retailers as they try to win market share amid soaring inflation, which has seen a marked shift toward discounters including Aldi and Lidl.

Asda introduced a new loyalty scheme for all its U.K. stores and online last summer, while Lidl launched an app-based scheme in 2020 and updated it last year so that shoppers had to spend to a higher threshold to get the maximum level of discounts.

Upscale grocery chain Waitrose brought back free coffee for members of its loyalty scheme last year, in an effort to turn around sliding sales and after an outcry over the removal of the perk.

Last month Tesco announced that it would reduce the value of its Clubcard rewards, as it switched its focus to reducing prices on shelves.

From June 14 customers will be able to double the value of their Clubcard points – rather than triple them as now – when they spend them with one of its reward partners on a restaurant meal, day trip or movie theater outing.