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.
