Can a card costing £95.88 a year REALLY cut your shopping bills?

SLIM profits from online sales are prompting supermarkets to boost their customer loyalty schemes to lure shoppers back into the stores.

Leading the pack is Tesco, which before the end of this year will l aunch a l oyalty subscription scheme, Tesco Clubcard Plus, rewarding customers with juicy discounts on their regular shop.

In return for £ 7.99 a month – £95.88 a year – cardholders will receive 10 per cent discounts for two big shops made in its supermarkets each month – up to a maximum discount of £20 a shop. If you spend £200 twice a month then you will be well in the money after a year – by £384.12 once you take into account the subscription bill.

Retail analyst Bryan Roberts from consultancy TCC Global says that disillusionment has grown with some older style l oyalty schemes, especially since Tesco and others scaled back some of the benefits of their points schemes over the last couple of years.

Roberts says: ‘ Our research shows that a typical UK shopper owns five loyalty cards but uses just two or three. Most shoppers want to be rewarded for loyalty by more than just a loyalty card. This goes some way to explain why Tesco and also Sainsbury’s have revamped their offerings.’

As well as money off the regular shopping basket, the new Tesco arrangement – a first of its kind subscription scheme that will be closely monitored by other retailers – provides discounts on nonfood brands such as its clothing range (F&F), Tesco Pet and Fox & Ivy homewares. By committing to a monthly payment, Tesco hopes shoppers will also spend more.

The programme is open to existing and new Clubcard holders.

The original Clubcard scheme (introduced in 1995) is still popular despite its benefits being diluted. Membership lets shoppers earn 1 point for every £1 spent in-store and online. On fuel it is 1 point for every £2 spent. The points are converted into vouchers posted out every three months that can be spent in store. Customers can get vouchers more quickly by downloading them on to the Clubcard Smartphone app.

Card users can boost voucher values threefold – reduced from fourfold last year – by spending them with scores of partners. So, a 50p voucher can be turned into £1.50 if spent at restaurants such as Prezzo and Café Rouge or towards a magazine subscription such as Bird Watching or Country Living. A £2.50 voucher can grow into 600 Avios points or 625 Virgin Atlantic Flying Club Miles – a special fivefold boost in value. Beware that vouchers normally expire after two years.

Sainsbury’s this month upgraded its loyalty scheme – called Nectar – by moving it on to a new app and website. First launched in 2002, the card already offers 18 million customers points and rewards including money off shopping, or on rail and Eurostar tickets, days out and trips to the cinema. The basic premise remains the same – one point for every £1 spent.

There is already an app option but current users must upgrade to benefit from new more personalised offers. The new version lets customers scan their phones in Sainsbury’s – and Esso petrol stations – instead of carrying a plastic card. The card can still be used in stores and any points already saved will be available on the app.

Points can be collected via more than 400 partners, including Argos, Asos, Debenhams, Next and Topshop. You can download the ‘Nectar toolbar’ to add to your web browser to alert you when you are on a site where you can earn or spend points. The personalised offers will go out every Thursday via an emailed newsletter, at nectar.com and in the app.

Nectar users should try to collect or spend at least some points during the year – otherwise the account will be closed after 12 months of inactivity.

Roberts says: ‘ Are these new schemes enough to tempt people away from low cost supermarkets such as Lidl and Aldi – where a shop typically costs 10 to 15 per cent less? Probably not, but the Tesco scheme looks great potential value for regular Tesco shoppers who spend more than £40 twice a month.’