Tesco has asked suppliers to jointly fund a massive surge in Clubcard promotions, as it opens a “new frontier” in the promotions war.
The Grocer has learned Tesco is writing to leading suppliers demanding up to 50% of the cost of the strategy, with eight Clubcard Bonus mailouts planned this year targeting 10 million customers at a time.
It is the latest move in CEO Philip Clarke’s plans to ramp up the use of Dunnhumby sales data for more personalised promotions.
Documents reveal Tesco expects to raise tens of thousands of pounds from medium-sized suppliers, with bigger supplies believed to be expected to stump up hundreds of thousands.
All brands with retail sale of over £500,000 a year are to be included, in a proportion based on their level of sales.
One sales director said the plans were set to be a “very significant” part of negotiations between Tesco and supplies over 2013/14 spending plans.
“The promotional lever is one that is bent over almost to the point of breaking, so we’re looking for more effective ways to spend our money and to some extent we’re at least open to the possibility this is a new frontier,” he said.
“There has been some candour in the communication we’ve had from them over this, admitting that previously they have fallen short in terms of innovation in Clubcard promotions,” he added.
“The existing situation is what we refer to in the trade as spray and pray. You just stick it on a gondola end and wait and see.
“That said Tesco doesn’t have a good record when it comes to be being a leopard that changes its spots.”
Another supplier said he feared the new drive was less about personalisation and more about Tesco squeezing more money from suppliers.
“This looks more like a return to old-school gun-to-the-head tactics,” he said. “If they are throwing all brands into the mix with those promotions, it doesn’t seem particularly personalised or well thought out.”
The Grocer revealed in July last year that Tesco planned to massively increase the personalised Clubcard blitzes aimed at its customers, with CFO Laurie Mcllwee warning its rivals that none of them came close to matching the power of its sales data.
“Clubcard is the main weapon in their armoury and I’m just surprised they’ve not done this before,” said one former supermarket MD.