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Retail news articles. ........Date: 10/1/2002

Loyalty Cards Don't Work Says New NOP Survey

Source:ASDA, Source date:


ASDA today unveiled new research by NOP that shows that plastic cards are failing to keep customers loyal. And as Sainsbury's pins hopes on a new loyalty card to improve sales, the survey shows that shoppers across the UK, regardless of their favourite store overwhelmingly prefer lower prices to plastic points. The key findings of the NOP survey, conducted at the beginning of this month show:
  • Over nine out of ten people (93 per cent) would prefer lower prices to loyalty cards;
  • Shoppers know there's no such thing as a 'free lunch' - Loyalty cards are strongly suspected of pushing up prices;
  • People have not warmed to loyalty cards in the last few years with almost three-quarters (73 per cent) saying their attitude to them had not changed.

And worryingly for retailers who've put their eggs in the loyalty card basket, customers say that loyalty cards make very little difference to where they shop, backing figures from leading retail researchers Taylor Nelson Sofres. These show sales growth at term loyalty card sceptics ASDA and Morrisons outpacing plastic advocates Tesco and Sainsbury by 10 per cent over the last two years*.

The NOP survey showed that 45-54 year olds were the most sceptical about loyalty cards with over three quarters (76 per cent) agreeing it they made little difference to where they shopped. The most sceptical regions was Yorkshire (74 per cent). When asked, 93 per cent of Sainsbury shoppers and 95 per cent of Tesco shoppers said they'd choose lower prices over Loyalty Cards.

On Monday, ASDA will do what it's done virtually every week since it abandoned its own loyalty card pilot in 1999 - chip away at prices. This year it expects to invest £200m in lower prices, with £50m scheduled for the final quarter of the year.

Price cuts implemented this week include reducing golden nuggets (375g) from £1.68 to £1.58, ASDA Tuna chunks (185g) from 56p to 48p and Palmolive shower gel (250ml) from £1.94 to £1.68.

"Customers aren't fooled by marketing gimmicks," said ASDA's deputy chief operating officer Richard Baker. "Shoppers' real loyalty only comes from offering the lowest prices on the right range of products.

"Latest figures from retail specialists Taylor Nelson Sofres show that ASDA is Britain's fastest-growing retailer. According to its Till Roll analysis for the 12 weeks to 18 August 2002, ASDA had a market share of 15.9 per cent of all grocers, with sales up by 11 per cent on the previous year.