Are Supermarkets Wrong to Offer Membership Pricing
4th December 2023
Written by Tom Peace
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On the 29th of November, an investigation was launched by the competition and markets authority in the UK into the use of membership pricing, specifically by supermarkets. The investigation is focussing on the rise of the loyalty card price cuts and how it has led to a drastic price increase for consumers who haven't signed up.
It has been reported that Tesco has more than 8,000 products that are cheaper for holders of its Clubcard and Sainsburys has about 6,000 items in its Nectar scheme.
With this recent news relating to the two mainstream loyalty programs in the UK, The Loyalty People wants to ask the community
" Are Supermarkets Wrong to Offer Membership Pricing?"
The number of loyalty programs from all industries has expanded substantially in the previous three years. It has gotten to the point where numerous customers compare loyalty programme perks before deciding which organisation to do business with. Although loyalty programmes have assisted businesses in maintaining high customer retention and building customer loyalty, many people do not participate in company loyalty programmes but are still regular customers of the business.
Many companies have implemented loyalty programmes to enhance client retention since the COVID outbreak and the surge in food supplies around the world. However, in a time when numerous economic and social world challenges continue to affect the regular individual, are food retailers misusing the economic crisis?
The counter-argument is that loyalty programs are quick and simple to join, and food retail loyalty points like Nectar can be utilised across numerous nectar-partnered establishments.
Many people around the world are still uncomfortable with businesses exploiting their data to understand their purchasing habits. Companies cannot legally utilise customer data without first obtaining approval. But this fails to reduce some consumers' concerns.
Should these shoppers be disadvantaged on price because they haven’t joined the loyalty program? And are the supermarkets and high street brands doing anything that many other sectors have been doing for decades?
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