With high food inflation continuing to put pressure on household finances, loyalty schemes are an effective way for supermarkets to compete with the consistently low prices of discounters Aldi and Lidl.

The most important aspects of loyalty schemes for consumers are discounts and rewards, with 51% stating that they valued “discounts open to all loyalty members” the most, with “money off future trips” and “rewards” the second and third most valued (19% and 11% respectively), according to GlobalData’s monthly consumer survey from August 2022. Other supermarkets should follow Tesco and Sainsbury’s example of offering their lowest prices to those signed up, as well as supplementing this with rewards and money off as added incentives for loyalty.

However, rather than increasing consumer loyalty with a singular retailer, 68% of consumers said that they use multiple loyalty schemes to make the most of savings on offer. The age group most likely to do this was 35 to 44-year-olds, with these shoppers likely to be spending more on housing and childcare costs, and thus feeling greater pressure to cut costs when shopping for essentials. To gain increased loyalty from this consumer group and others, supermarkets should ensure that they offer competitive member pricing on everyday staples.

Yet almost two-fifths of consumers also stated that they do not use loyalty schemes because they do not want to share their data with retailers. This is most prevalent among 16 to 24-year-olds. Retailers must work on explaining how they use customer data and give reassurances regarding privacy to alleviate the concerns of younger consumers. Equally, retailers may need to give an added incentive to garner appeal, through more attractive rewards or freebies, both of which were valued more highly by consumers in the 16 to 24 and 25 to 35 age ranges. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.