Sainsbury's Nectar points cut angers customers

http://www.theguardian.com/money/2015/apr/10/sainsburys-cuts-to-nectar-points-anger-its-customers

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Sainsbury’s shoppers who hold a Nectar card will have to spend twice as much in store from Saturday to earn the same level of points, as controversial cuts to the retailer’s loyalty scheme take effect.

The supermarket giant faces a potential loss of customers, with discount supermarkets Aldi and Lidl looking likely to be the winners.

Shoppers currently get two points for every £1 spent in Sainsbury’s, Homebase and BP petrol stations. Each point is worth half a penny. This will fall to one point for every £1 spent at Sainsbury’s from tomorrow. Consumers will also no longer receive a point every time they use their own bag.

John Salt, a Sainsbury’s shopper from South Milford near Leeds said he and his wife Julie currently collected Nectar points from their £120 weekly shop at the supermarket and spent them each Christmas.

“Sadly, in the future this yearly event may not be as much fun as it used to be given the reduced allocation from our weekly trip,” he said.

Instead, the couple intend to forfeit their Nectar points and shop elsewhere.

“There is currently an Aldi under construction a mile from where we live. We may join the refugees from the higher end stores who are trying the Aldi and Lidl experience.”

Another Sainsburys customer, Michael Collins, said: “I will be going to Aldi as there’s no point me paying a premium on products at Sainsburys for little reward when I can save my money at the Aldi nearby.”

Denzil Clark, who also shops at the supermarket, said. “As a longtime loyal shopper I find the halving of Nectar points both unreasonable and unacceptable. We have not swapped supermarkets yet, but we are considering it.”

When the cut to Nectar points at Sainsburys was announced in October, Natalie Berg, a director at Planet Retail described the move as as “the death of the loyalty card”.

“Let’s face it, consumers today are promiscuous; they shop around for the best deals. They often visit more than one supermarket on the same day and increasingly this involves a trip to the discounters. So, the idea of being loyal to a particular grocer is a thing of the past,” she said.

However, Joanne Denney-Finch, chief executive of retail analysts IGD, said on Friday: “Loyalty cards remain an important tool for grocery retailing. Seven out of 10 shoppers tell us the ability to use one is an important factor when choosing where to do their food shopping. This compares to six out of 10 who said the same in 2011.”

To try to soften the blow, Sainsbury’s has launched a deal on petrol for Nectar card holders, who can now get 10 points per litre of fuel purchased at Sainsbury’s petrol stations, instead of the usual one, until 10 May. In a statement it also said that it would offer “more targeted, personalised rewards to our customers” from this weekend.

Earlier this year, Sainsbury’s bank quietly scrapped the generous eight points per £1 shoppers who take out its Nectar Bonus credit card could get for the first three months of use.

Sainsbury’s is not the only retailer to annoy its customers by cutting its loyalty scheme. Last summer John Lewis dropped the free cake and tea for loyalty-scheme members just months after it had launched it (selected customers continue to receive the vouchers).

Earlier this year, British Airways caused outrage when it announced cuts to its popular airmiles scheme, Avios. From 28 April, the number of airmiles the cheapest economy class tickets will earn will be cut by 75%, while business and expense-account flyers will be given more rewards.

A basic economy-class ticket from London to New York will from 28 April earn just 865 airmiles, down from 3,458. Previously the number of points earned on a return flight across the Atlantic would have been enough to obtain a flight from London to Milan (plus a £35 fee), but after the changes it will fall far short of any destination served by British Airways.

Morrisons, on the other hand, has just begun to reward its shoppers for sticking with its stores, with the launch of its card last October.

Other popular schemes that currently remain the same include Tesco Clubcard and Boots Advantage.