Supermarket Loyalty Cards
In the dim and distant past, UK supermarket loyalty cards used to be about earning points that could be traded for luxury items. This would be merchandise or services. Air Miles being a prime example. This changed over time and supermarkets moved to a system where you earned points via purchases that had a nominal financial value. The customer could then offset these accumulated points against their grocery bill. A couple of years ago, around the time the “cost of living crisis” began, some UK loyalty cards added an additional system and started offering discounted prices on specific products. For example a pack of 9 Andrex Complete Clean toilet rolls retails at the standard price of £5.95 but if you have a loyalty card, you can purchase it at the lower price of £4.65 instead.
Although overall inflation is reducing in the UK, food inflation remains high, as do energy prices. These may well stay that way due to potential global factors that could come into play next year. Hence supermarket loyalty cards will continue to play a major role in keeping the price of a weekly or monthly grocery shop manageable. The discounts on offer are such that our household currently has four loyalty cards from the following stores. Tesco, Sainsbury’s Morrison’s and the Co-op. We shop at specific stores for particular products that are maintained at a discount price. We have found it possible to make savings of £40 or even £50 a month, if we keep an eye on prices across all four stores. Often this means having an app installed on my phone and being notified of offers.
Naturally, the increase in this loyalty card culture has generated a great deal of interest. How do the big supermarkets accommodate such competitive pricing? Is it simply a question of loss leading, or is it a case of inflating the original price and then offering the minimum retail price as the discount? Is this practice sustainable? There have also been claims that the system is unfair and biassed towards those who can afford to shop at the top tier supermarkets. The counter argument is that the budget stores are already offering discounted products by default, as it is essentially the foundation of their business model. Whatever the methodology and irrespective of the ethics of supermarket loyalty cards, it certainly isn’t impacting upon profits. Tesco, the UK’s number one supermarket chain, had a turnover of £48 billion in 2023.
Unless you are so wealthy that the cost of living is not a consideration, most people have some requirement to “shop smart” these days. We make use of loyalty scheme discount prices and buy some products in bulk from outlets such as Amazon. Tea has fluctuated in price over the last eighteen months, mainly due to adverse weather conditions in the countries of origin. As Mrs P is highly unlikely to stop drinking the stuff anytime soon, we tend to buy a half dozen boxes at a time. The panic buying we all saw at the start of the pandemic is another reason why we like to maintain a small stock of some products such as toilet rolls, cleaning products and pasta. Until the economic situation improves, we will continue to make use of any scheme or process that allows us to keep our grocery bill as low as reasonably possible. Perhaps we can gamify the process to stop it from becoming a chore.
