With promotions and price cuts everywhere you turn it is clear that the grocers need something else in their arsenal to make vacillating customers more loyal to their offer in the long run.

You can’t open a tabloid newspaper at the moment without being bombarded with adverts for the grocers.

Take today for example. The range of ads in The Sun promote a Tesco family meal deal for four for £5, Asda’s Hannah Montana dress for £10,Asda’s fruit and vegetables deal for £1 each, Morrisons’ half price beauty products and Tesco’s half-price home phone and mobile accessories products.

The grocers’ price war is essential in the battle to win cash-strapped shoppers. What the recession has meant is that food shoppers are more even more fickle and will change supermarket at the drop of a hat if they believe they will get a better deal somewhere else.

But as Tesco boss Sir Terry Leahy pointed out this week, it is also about loyalty.

Leahy said it is important to win the price comparison battle, but added that what’s even more important, is building loyalty.

In what will be a “substantial investment” for Tesco, the grocer is to relaunch its Clubcard loyalty scheme in the next few weeks, which Leahy believes will stand the grocer in good stead both during the recession and when the market starts to pick up.

When food prices spiked, consumers started shopping around and it was essential that grocers fought in the price promotion war. The danger is though that consumers end up not knowing the price of anything.

When the market starts to pick up, consumers will probably think the major grocers are much of a muchness in terms of price. There will be certain things that sets them apart but price will be very blurred.

Tesco’s Clubcard is already standout among loyalty schemes and the grocer will now complement price promotions with even more rewards.

The grocer has already done very well with its Pizza Express and Strada vouchers, which are redeemed with Clubcard points. If Clubcard is relaunced with even more rewards available, it could mean that shoppers can go on days out or enjoy family activities without seemingly opening their purse.

Tesco is clearly seeing signs of the economy bottoming out and if consumer confidence is on the up, shoppers will want to enjoy themselves while still counting the pennies. It’s a smart move from Tesco that once again shows the grocer is taking a long-term view.

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