Sainsbury is aiming to squeeze more out of its Nectar loyalty scheme, after it reported a collapse in annual profits this week from £610m to £15m.
The supermarket is planning to include fmcg brand offers for the first time. In the past it has only offered customers bonus points on own-label products and fresh produce. Bogofs and bonus points on specific items are being looked at.
Chief executive Justin King has made no secret of the fact Sainsbury needs to get more value for money from the scheme, which costs it more than £120m a year, half of its total marketing budget.
Despite the retailer’s plunge in pre-tax profit for the year to March 26, sales were up 5.5% to £16.4bn and the underlying profit was a slightly more promising £254m. Exceptional costs from its business review hit £510m in the past year, with a further £50m estimated for the year ahead.
Although they represent the company’s biggest profit fall in 135 years, King was bullish that his turnaround plan for the multiple was on track.
In March, Sainsbury’s fourth-quarter trading statement showed underlying sales up for the first time in two years, with like-for-likes up 1.7%.