Marketing director Carolyn Bradley said Tesco would extend its offer of double points, introduced last summer in a bid to halt shrinking market share, "for the foreseeable future", to try and build on the momentum it gained over Christmas.
Tesco also said it would make five people 'Clubcard millionaires' by loading a million points, worth £10,000, on to its customers' cards.
Tesco's market share in the 12 weeks to 24 January grew to 30.5% [Kantar Worldpanel] while Asda, which doesn't operate a loyalty scheme, was the only one of the big four to see its market share fall. Asda blamed the snow, and last week issued £5 and £10 coupons in national papers to make up for lost sales, but Tesco responded with posters outside stores offering to accept Asda's vouchers. Asda has also started sending plastic money-off cards to customers who buy from its gift site, referred to as "loyalty gift cards" in literature.
Bradley criticised Asda's decision to issue the vouchers and cards, after chief executive Andy Bond reaffirmed Asda's commitment to an everyday low price strategy last year, by claiming retailers could "not buy loyalty with plastic points". "I think it is quite ironic. Asda always said you can't buy loyalty and that it is a gimmick, and here it is deciding to join in," she said.
Asda denied its gift card was in any way a loyalty card. "We are not into loyalty schemes, we have made that quite clear," said a spokeswoman. She said the card was to encourage shoppers seeking gifts to think of Asda.
But loyalty cards were the crucial tool in the battle for customers, Sainsbury's insight director told The Grocer. Andrew Mann, who said Nectar now had 16.8 million users, more than any other UK loyalty scheme, said there was "a division in the retail world at the moment between the haves and the have-nots of loyalty". Tesco and Sainsbury's could capitalise on being able to target promotions at specific customers, unlike Asda and Morrisons, he said.
Jonathan Pritchard, analyst at Oriel Securities, agreed loyalty cards were proving to be a crucial tool in the battle for customers.
"At the moment is it a two-horse race between Clubcard and Nectar," he said. "Tesco's double points offer has clearly worked it has contributed to significant growth during the last two quarters, while Nectar is obviously performing very strongly too."
Tesco this week launched an iPhone app that will dispense with the need for a plastic card altogether by enabling customers to scan the phone at the till. Similar technology is being made available for other smartphones later this year. However marketing director Carolyn Bradley said phasing out plastic cards would be "a long way off" because the card was a familiar fixture for shoppers.