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- the author, Jennifer Meierhans
- role, Business reporter
New supermarket “challenges” that reward shoppers with extra loyalty points for buying more could lead to overspending, consumer groups have warned.
Four of the UK’s biggest supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – are now offering members of their loyalty schemes bonus points if they hit spending targets.
All the supermarkets say their schemes offer customers better value and more personalized savings.
But the group of consumers Which? and debt charity StepChange warned that setting shopping challenges could encourage people to spend more than they can afford.
These challenges are the latest development in supermarket loyalty card schemes, which are becoming increasingly sophisticated.
At the same time, food prices were rising at an annual rate of almost 20% last year – the highest since the 1970s – and are only now returning to “more normal” rates.
“Competition among supermarkets is fierce at the moment, with everyone shouting about the number of price drops,” said Ele Clark, retail editor at Which?. “But the fact remains that overall food is still much more expensive than it was a few years ago.”
Ged Futter is a former buyer for Asda and now advises suppliers on how to negotiate with retailers. He said the personalized prizes and challenges were simply a way for supermarkets to compete for customers.
“They’ll look at the products you buy during the month and then give you offers to make sure you buy that product again with them,” he said.
Challenges vary between supermarkets and include shopping more frequently or reaching a spending target for specific products within a certain time frame.
‘Like a game’
Jo Rourke, a single mother of three from Manchester, told the BBC shoppers “need to tread carefully” when it comes to loyalty card challenges or missions.
“The terminology of ‘challenges’ can make it feel like a game, and if you’re someone who’s drawn to that kind of thing, it can be quite dangerous,” she said.
Ms Rourke – who shares tips on how to save money at the grocery store on her social media accounts @thismumcooks – said yes don’t think supermarket challenges would encourage her to do more of her shopping in one store.
“I don’t think it’s worth being a loyal customer. I think it’s worth shopping at all the supermarkets in your area,” she said.
The average person has loyalty cards for three supermarkets, data from research firm Kantar suggests.
- Learn the prices: Know the cost of items you buy regularly so you can tell what’s a good deal and what’s not
- Compare the price for 100 g: Look across the rack for similar items as loyalty prices may not be the cheapest option.
- Set a budget and stick to it: Often coupons or supermarket challenges will ask you to spend more, so don’t be tempted to overspend
- Enter: If you want to take advantage of a cash-free voucher, then buy bulk staples such as pasta, rice or canned foods that have a long shelf life
- Use technology: Use standalone supermarket comparison apps to save your favorite items and get alerts when the price drops
inquiry
Mrs. Clark in which? told the BBC: “With many families struggling to make ends meet, it is important that supermarkets do not overplay these challenges and encourage shoppers to spend beyond their means to get rewards.”
It is examining whether loyalty prices are a genuine promotion or can mislead shoppers, whether they put any groups at a disadvantage and whether they affect shopping habits and how supermarkets compete with each other. An update on its findings is expected in July.
Simon Trevethick, head of communications at StepChange, said: “While retailer loyalty schemes can offer useful discounts to customers, there is a risk that if spending is pushed, people may end up spending more than they originally planned or may afford.” He urged anyone in financial difficulty to contact the charity.
The BBC asked Tesco, Sainsbury’s, Asda and Morrisons for their response to concerns that their loyalty challenges could fuel overspending.
A Tesco spokesman said its Clubcard challenges were “all about rewarding customers for buying products they buy regularly”.
Sainsbury’s said its Shop for Points challenge was offered to selected customers and bonus points were “issued based on the number of stores customers complete, with a minimum qualifying spend of £1 per store”.
Asda and Morrisons did not respond.
Do you use a supermarket loyalty card? Do you work in a supermarket? Share your experiences.