Not enough has been made of the significance of Sainsbury’s move to buy Nectar. Tesco has traditionally had an advantage in loyalty because of Dunnhumby’s leadership on data mining and shopper insight generation. Just look at the recent Tesco range resets. Without doubt its ability to reduce its product count and complexity by some 30% with barely a complaint is down to this.

The Nectar move indicates Sainsbury’s is now stepping up its interest in getting close to its shoppers in the same way. The timing makes sense as inflation is coming over the hill while the two big threats to the big supermarkets - namely the discounters and online - are increasing in pace of growth.

David Sables

The battle for the hearts, minds and wallets of shoppers is in its height. Retailers are testing the waters in several key battlegrounds: in-store versus online, big shop vs easy shop, range choice versus cheap product. The next three years will really sort the winners from the losers - in a saturated market when another 6% share is heading into discounters, something has to give.

But remember, the discounter wins have not only been down to the prices. It’s now a plausible weekly shopping solution, too. Their local marketing makes them look more British than Yorkshire pudding, and the old stigma of Aldi and Lidl is all but gone. Even some of the Waitrose die-hards are migrating. And on top of that Aldi is now taking a leadership role in food waste - how endearing.

From inflation to GSCOP, there are many negative influences on retailers’ margins, and the only way to survive is to differentiate, diversify and stay ahead on technology once the clean-up and clarifying job is done. Big retailers are making every effort to clean up their irrelevant ranges and clarify the shopper-differentiated offering so that they might get some loyalty among the returning disillusioned bargain hunters who don’t want rip-off brands or socket sets intruding on their idea of a grocery shop.

Getting all this right requires in-depth shopper data, fuelling shopper focus, driving shopper loyalty. It is the only way to go and Sainsbury’s may well be taking a leap forward with its Nectar deal.

David Sables is CEO of Sentinel Management Consultants