Tesco has led the charge on loyalty cards. Will its Clubcard relaunch next week win it back customers from competitors Asda, Sainsbury’s and Morrisons?

Next week Tesco will once again start a supermarket war with its £150m investment into its loyalty scheme, Clubcard. The investment marks the biggest change to its Clubcard scheme since it was launched 15 years ago. But does it also mark a new era in supermarket wars?

As well as being market leader in grocery, Tesco is also market leader in loyalty. When other grocers pulled back from loyalty card schemes, Tesco forged ahead, knowing in the long term it would prove a successful strategy.

The strategy has paid off. Tesco has more than 15 million Clubcard customers and the vouchers redeemed from points have proved invaluable for customers, especially in the recession. Tesco said earlier in the year that customers have been redeeming vouchers for family days out at attractions such as theme parks more than ever. And customer research told them that some customers wouldn’t have been able to afford that day out if it wasn’t for the voucher. One customer even saved up all her points to redeem against an engagement ring from partner Goldsmiths.

Tesco has admitted it has lost some customers over the past few months as customers shop around and try out hard discounters Aldi and Lidl. It launched the Discounter range to counter this, and like other grocers, has stepped up the price war.

The Clubcard move is different. Tesco’s nearest rival in loyalty is Sainsbury’s with the Nectar scheme – which it operates alongside other retailers and has around 10 million active members. But Asda and Morrisons don’t operate the same schemes.

If Tesco manages to push the limelight off price wars and onto the loyalty card wars, it could pull off a major coup. It is expected to attract at least 1 million more customers to its scheme with the relaunch, and if existing Clubcard users find the deals attractive, they will stop shopping around and stick to Tesco for their shopping.

While many retailers have said the economy is bottoming out, they aren’t yet saying we’re in recovery. So at the moment, every penny still counts. With the prospect of unemployment still looming over large swathes of the country, shoppers will continue to try to make their money stretch further.

We will undoubtedly see further heavy price wars among the grocers, but if Tesco can keep banging the loyalty drum, it may well stand out from the crowd.  

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