Nectar hit after points cut at Sainsbury’s
SAINSBURY’S reduction in the number of Nectar points it awards customers has hit revenues at the company behind the loyalty scheme.
Accounts just filed by Nectar’s parent company, Aimia Coalition Loyalty UK, show that sales slipped in the year ending December 31, 2015 from £310million to £295million, while pre-tax profits fell from £18.5million to £17million.
Aimia said that turnover fall was ‘driven by a decrease in the redemption of points’ and a company source confirmed that this was ‘mostly as a result of changes in the way customers earn points at Sainsbury’s’.
The supermarket group last year controversially halved the number of points awarded.
Points are collected by shoppers when they spend money at companies including Sainsbury’s, Next, BP and British Gas. Nectar receives a payment when a retailer issues a point to a shopper and it then compensates retailers when the points are redeemed.
Nectar was dealt a further blow this year when the new owner of DIY chain Homebase said it was pulling out of the scheme by the end of 2016.
Aimia said it was ‘confident that the company can continue to deliver growth by increasing the number of consumers using the scheme, and improving their engagement with the programme through continued expansion of the portfolio of rewards and signing new commercial partners’.