Picture the scene: it’s the end of a long day of lectures, you’re hungry and ready for dinner. You walk around the supermarket meticulously scanning the shelves for a yellow label. You find one, exclaiming “ooh… bargain!” You march, elated, to the self-checkout and scan the item, followed by your loyalty card, and with a satisfying ‘bloop’ you’ve saved £2.
This is a story we all know and all love, but are these loyalty cards really as dreamy as they seem? With deadlines piling up, I decided it was an appropriate time to conduct some extensive detective work on the matter.
The ‘regular’ price of Bold washing machine tablets is £9.60 at Tesco but the Clubcard price is £7.00. Similarly, you can make a £4.75 saving with a Nectar card if you buy a bottle of Famous Grouse at Sainsbury’s. And I could go on as Tesco and Sainsbury’s have over 10,000 items on their loyalty card schemes.
But these discounts shouldn’t be taken at face value. Research conducted by Which? shows that supermarkets tend to hike up the ‘regular’ price of products so the yellow label appears to be a bigger saving. They found that two weeks before they introduced a discount on Nescafe coffee, Sainsbury’s ‘regular’ price was the same as the new discounted price.
What’s more, the loyalty card price of both Bold and Famous Grouse is no better than the regular price of the products in Morrisons and other supermarkets. So, although it may appear that the discount is considerable, the reality is that the ‘regular’ price is just extortionate.
It’s definitely cheeky, but if the majority of us have loyalty cards (over 90% of the adult population) is it really a big deal? Well… yes.
Economists determine inflation based on a ‘basket of goods’ which takes into account the price fluctuations of everyday essentials like food, drink, bus fares and much, much more. However, when the Office of National Statistics records these prices, they don’t take into account the loyalty card discounts. This means that the exaggerated ‘regular’ price of food in supermarkets like Tesco and Sainsbury’s is driving up inflation figures which has a real-world impact on the cost-of-living.
But, the real reason why supermarkets use loyalty card schemes is for our data. When you sign up for a loyalty card you’ll notice that they ask for a number of different personal details including date of birth, address, and phone number.
So, what do supermarkets do with this data? It helps them build profiles for their customers which is not only useful for them but also to third parties (like advertising companies). So, it’s no coincidence that during the ad break of Love Island, I’m watching advertisements for Heinz beans, custard cremes and cheddar cheese, because (as the embodiment of sophistication) that is what I buy. Supermarkets are taking advantage of customers not being able to afford their bloated ‘regular’ prices to extract our data and sell it on.
I’m by no means suggesting that we all throw away our loyalty card, but with all this considered, the next discounted packet of custard cremes I buy will be both food for dinner and for thought.
“Tesco Extra” by Tesco PLC is licensed under CC BY-NC-SA 2.0.
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Loyalty cards: savings or scams?
Picture the scene: it’s the end of a long day of lectures, you’re hungry and ready for dinner. You walk around the supermarket meticulously scanning the shelves for a yellow label. You find one, exclaiming “ooh… bargain!” You march, elated, to the self-checkout and scan the item, followed by your loyalty card, and with a satisfying ‘bloop’ you’ve saved £2.
This is a story we all know and all love, but are these loyalty cards really as dreamy as they seem? With deadlines piling up, I decided it was an appropriate time to conduct some extensive detective work on the matter.
The ‘regular’ price of Bold washing machine tablets is £9.60 at Tesco but the Clubcard price is £7.00. Similarly, you can make a £4.75 saving with a Nectar card if you buy a bottle of Famous Grouse at Sainsbury’s. And I could go on as Tesco and Sainsbury’s have over 10,000 items on their loyalty card schemes.
But these discounts shouldn’t be taken at face value. Research conducted by Which? shows that supermarkets tend to hike up the ‘regular’ price of products so the yellow label appears to be a bigger saving. They found that two weeks before they introduced a discount on Nescafe coffee, Sainsbury’s ‘regular’ price was the same as the new discounted price.
What’s more, the loyalty card price of both Bold and Famous Grouse is no better than the regular price of the products in Morrisons and other supermarkets. So, although it may appear that the discount is considerable, the reality is that the ‘regular’ price is just extortionate.
It’s definitely cheeky, but if the majority of us have loyalty cards (over 90% of the adult population) is it really a big deal? Well… yes.
Economists determine inflation based on a ‘basket of goods’ which takes into account the price fluctuations of everyday essentials like food, drink, bus fares and much, much more. However, when the Office of National Statistics records these prices, they don’t take into account the loyalty card discounts. This means that the exaggerated ‘regular’ price of food in supermarkets like Tesco and Sainsbury’s is driving up inflation figures which has a real-world impact on the cost-of-living.
But, the real reason why supermarkets use loyalty card schemes is for our data. When you sign up for a loyalty card you’ll notice that they ask for a number of different personal details including date of birth, address, and phone number.
So, what do supermarkets do with this data? It helps them build profiles for their customers which is not only useful for them but also to third parties (like advertising companies). So, it’s no coincidence that during the ad break of Love Island, I’m watching advertisements for Heinz beans, custard cremes and cheddar cheese, because (as the embodiment of sophistication) that is what I buy. Supermarkets are taking advantage of customers not being able to afford their bloated ‘regular’ prices to extract our data and sell it on.
I’m by no means suggesting that we all throw away our loyalty card, but with all this considered, the next discounted packet of custard cremes I buy will be both food for dinner and for thought.
“Tesco Extra” by Tesco PLC is licensed under CC BY-NC-SA 2.0.
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