Shoppers love loyalty prices, our survey shows. But how genuine are the deals? And are they fair on shoppers who don’t have one?


It was in the autumn of 2020 – not long after the first lockdown – that Tesco officially launched Clubcard Prices.

The new direction for its Clubcard loyalty card programme – offering exclusive discounts of “up to 50%” – was very low key: just 200 products. With promotions having plummeted in response to the pandemic, it was easy to view Tesco’s promise of “hundreds” of discounts for loyalty card holders as tokenist. And its significance was further masked by Tesco’s simultaneous messaging around EDLP, with news that Tesco’s Aldi Price Match initiative was being ratcheted up to 500 lines.

But from the low “hundreds”, the number of Clubcard Prices has risen to the high “thousands”. Around 8,000 Clubcard Prices are available every week. And today you would be hard-pressed to find a pricing promotion that isn’t exclusive to Tesco Clubcard members.

It’s turned out to be “a genius move” for Tesco, for its loyalty card, for its retail media sales, and indeed for its suppliers. Engagement has soared, with over 20 million households now owning a Clubcard and more than 80% of sales made using a Clubcard. And in conjunction with its EDLP offer – with Aldi Price Match now on 600 lines, and Low Everyday Prices on a further 1,000 healthcare and household items – sales and profits are booming, as its latest results showed.


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But has it been good news for shoppers? What do they really think of its exclusive deals? And with Sainsbury’s enjoying similar success with the launch of its Nectar Prices last spring, and Morrisons recently introducing loyalty pricing too – are the exclusive deals fair on regular shoppers who don’t have a card, or have left it behind?

Which? is not convinced. The consumer affairs group’s investigations into loyalty price promotions “uncovered” “potentially dodgy”, “seemingly dodgy” and “dodgy-looking” tactics.

And the Competition & Markets Authority is concerned. It launched an investigation in January. The results are expected in July.

But as the CMA deliberates, The Grocer has conducted some research of its own – in association with Toluna & Harris Interactive – to find out what shoppers think about loyalty pricing and loyalty cards as a whole.

The results are revealing. Using a national representative sample of over 1,000 main household shoppers, the survey shows that shoppers have given loyalty pricing a big thumbs-up. In the space of a few short years, instant discounts are now valued more highly than any other loyalty membership benefit. And by a significant margin: 54% of shoppers value instant discounts the most, while vouchers on future shops – offered by the likes of Asda, Lidl and Waitrose – are valued most by just 22%.

It’s clear that these days most shoppers don’t want to wait for their vouchers to arrive, or to redeem them against a future shop. They want an immediate reward for their loyalty, says Lucia Juliano, head of research at Toluna & Harris Interactive.

“What comes through loudly and clearly is that shoppers much prefer instant rewards and savings over vouchers for future shops – this immediate and visible discount feels more tangible and rewarding.”

Other traditional loyalty card benefits feature even further down the list. One of the most popular benefits when loyalty cards first launched was ‘points’, to be used for cinema tickets and other red letter days. And while time-limited double points initiatives cause an occasional flurry, these days it’s seen as a fringe benefit, picked by just 10% of shoppers.

Similarly, the reassurance provided by price-matching schemes – a benefit first popularised in the late 2000s and still used by Ocado – is only valued by 9.5% of shoppers.

As to charitable donations, at 1.4% they barely register with today’s cost-conscious shoppers. It’s doubtless why The Co-op announced instant discounts of its own in a revamp of its loyalty programme in January.

Tesco Clubcard prices

Clubcard Prices was the first supermarket loyalty programme to offer member-only prices

Exclusive club

Ease of use has been crucial to the success of loyalty pricing. Those instant discounts mean that members don’t have to store up savings for future use.

But what about ease of access? There are concerns loyalty pricing is creating a two-tier pricing structure in which shoppers are excluded from the best prices if they don’t have a card.

Of course, that’s increasingly unlikely. Today 94% of shoppers are members of at least one supermarket loyalty scheme, the survey found. On average they own 3.4, with Tesco’s Clubcard – used by 77% of shoppers – the most popular, followed by Sainsbury’s Nectar card (49%), and the Boots Advantage card (38%).

The advent of the smartphone has been a real game-changer in the proliferation and wider use of loyalty cards. Where purses and wallets once bulged with loyalty cards, the majority of shoppers (60%) use store loyalty apps on their phone to access membership benefit.

The near-universal ownership of smartphones means the chances of forgetting your loyalty card are minimal: 10% of shoppers admit they sometimes or often forget to bring their loyalty cards with them when out shopping. And 55% say they always remember to bring their loyalty cards with them as they’re on their phone.

Alessandra Bellini, the ex-Tesco chief customer officer who conceived the idea of member pricing and led the team that delivered Tesco’s Clubcard Prices programme, says “ease of use of the customer journey (if on an app) is paramount. Nearly half the people surveyed have their app on the phone. That is the real opportunity to make everything easy for the shoppers.” And millions were invested by Tesco to ensure the technology works seamlessly.

Nectar Prices - Sainsburys Nine Elms

In April 2023, Sainsbury’s overhauled its Nectar loyalty scheme with the launch of Nectar Prices

Digital divide

Use of mobile apps to access savings has heightened fears over the so-called ‘digital divide’, however, eliciting concerns that the elderly and most hard-up shoppers are potentially missing out.

These concerns are legitimate. The popular Lidl Plus app, for example, is exclusively available on smartphones and the Morrisons More card offers extra points to mobile app users.

However, it isn’t an inability to access digital technology that stops shoppers from using a loyalty card. It’s most likely apathy: 2.1% say they can’t be bothered to use a loyalty card; 1.9% don’t have the patience as they feel it takes too long to build up rewards.

And while a handful of respondents said they don’t own a smartphone or computer, crucially, you don’t need one – or even access to the internet – to use a loyalty card. You can sign up in store, or apply in writing.

Another concern raised about loyalty card pricing is the exclusion of shoppers who have privacy/data concerns. But at 0.6% it’s again marginal.

“The value exchange of getting better prices versus giving up my data is understood and, for the majority, a non-issue,” says Bellini.

“If what you get in exchange is relevant it is OK; if you feel invaded in your life and bombarded, it is not OK.”

The other factor that’s made loyalty pricing such a game-changer is the savings shoppers are making. The fear of missing out has prompted more people either to sign up (25%) or reactivate their memberships (17%).

And not just for big shops, but whenever they can.

Arguably the most important impact of loyalty prices, however, is on loyalty itself. For years the concept of loyalty has been something of a joke, as fickle shoppers switched shops depending on deals. But over a quarter (27%) of shoppers admit they’ve switched more of their shopping to a particular supermarket as the deals are so good.

“The move towards discounts exclusive to loyalty card shoppers is driving stronger loyalty and positive shopper sentiment during these hard economic times,” says Juliano. “We see a visible acknowledgement that loyalty pricing really does drive loyalty and people tend to stick to a supermarket more and shop around less.”


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Lidl Plus Offers

The Lidl Plus app is exclusively digital, available via a smartphone app

Offering genuine value

Value was crucial to the construct of Clubcard Prices from the start, recalls Bellini. The first tests of member pricing were conducted in 2018 as part of a wider review of its strategic price approach after noting how “customers felt the loyalty schemes were becoming progressively less generous”.

“We ran trials with customers and colleagues to find ways to give instant value to customers,” she adds. “What we consistently saw was how they appreciated a discount in return for their loyalty. And it became apparent that we needed to do two things: to be an essential EDLP player in terms of the basics; and to replace the untargeted promotional deals as a reward for buying non-everyday items, with price cuts that were targeted and deep.”

And the deals are significant, says Kay Staniland, MD of price and promotions tracking analysts at Assosia. “Loyalty pricing is not only saving shoppers money, it’s driving down inflation.”

We’ve seen the impact of loyalty pricing in the Grocer 33, our weekly price comparison service (which is powered by Assosia) too. In the first 44 weeks of this year’s price competition, Tesco has been cheaper on 18 occasions when Clubcard Prices are factored in, versus 11 wins for Asda. Even Sainsbury’s is giving Asda a run for its money, if you factor in Nectar Prices that is. It’s won nine times – including this week.

So are the loyalty price deals “dodgy”? Shoppers don’t think so. Almost 50% think they are either always or often better than promotions from rival supermarkets, and a further 27% acknowledge they are occasionally better than promotions from rival supermarkets.

Of course, some are sceptical about the nature of these member-only deals: around 9% think loyalty pricing deals are no different from promotions offered by rival supermarkets, while 6% say all promotions are a bit of a con.

But there is always a degree of shopper cynicism about offers. And crucially it’s not exclusive to the loyalty pricing mechanic. Asked how they view supermarket promotions in general, 12% said promotions were a con as the starting price was always higher simply to create the illusion of value.

With the instant savings that loyalty pricing is delivering, shoppers are convinced the deals offer better value, and are voting with their feet (and fingers). The Tesco and Sainsbury’s loyalty cards are not only the most widely owned, they’re the most widely used and most highly valued. Tesco Clubcard in particular enjoys a formidable advantage among shoppers, with 44% of shoppers saying it’s the one they use the most.

Thirty-nine per cent, meanwhile, believe Tesco offers the best value to its shoppers.

As to the worst value loyalty card, most shoppers aren’t sure (41%) and for Juliano, it “cements the view that any savings are welcome in today’s economic climate”.

It’s a point reinforced by attitudes towards offers in general. While 24% don’t always believe promos offer genuine value and think the starting price was likely inflated, just as many (24%) profess not to know how genuine the deals are but say they will take any saving they can. And 38% see promotions as offering genuine value.


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The survey also highlights the multiple use cases for deals, whether that’s to stock up on favourites (57%); trial NPD (51%); or switch to a cheaper brand (45%).

So is there a problem here? It’s clear shoppers love loyalty pricing. And the majority (67%) also think offering special deals exclusively to members is fair. But a sizeable minority (16%) think dual pricing is wrong.

And some have taken action as a result: 22% have removed items from their baskets; 17% have switched to different products or brands; and almost 10% have abandoned their shops altogether. And while 38% have carried on with their shop, paying the full price for items they’ve selected, 8% say they’ve since avoided that supermarket permanently.

On the other hand, the fact supermarkets are willing to risk losing customers who feel excluded shows how powerful loyalty pricing has become: how magnetic it is in terms of loyalty; and how valuable it is in driving retail media income.

“It’s a genius move,” says Richard Lim, CEO of Retail Economics. “It’s prospect theory in action: if you show the consumer what you’ll not receive, it’s a more enticing generator of behaviour than the discount itself. I’ve experienced it myself, walking in to a supermarket to get some felt-tip pens for my daughter. Either I pay £3.50 or £1.90. It’s no contest.”

But he also worries what the long-term future looks like. “It makes price transparency and price comparisons quite elusive when swathes of the industry are doing loyalty pricing. Tesco was the first to introduce it and it worked successfully. But when a third of the industry is doing it and it’s in Sainsbury’s, Pret, Superdrug etc, it gets to the point where consumers don’t see it as a discount, it’s a tax or penalty they have to pay for normal prices.

“This illusion of discounts and how pricing and promotion work might come under scrutiny as every other retailer piles in,” Lim adds. “The perception is they have to sign up to pay a fair price and not be penalised. That’s a risk for the retailers. Unit pricing makes it difficult enough. Comparing loyalty prices is even more difficult.”

Ultimately it’s up to the Competition & Markets Authority to decide. But unpicking loyalty pricing won’t be easy. It’s been widely adopted by retailers. It’s captured the imagination of shoppers. It’s saving them money. What’s not to like?