Giving thanks to Nectar
It has been a good week for loyalty schemes, with endorsements coming from several fronts. 
Not least yesterday, when Sainsbury’s chief Justin King again gave thanks for Nectar, saying that “those without data” were being drawn into “ever more promotions: because they lack the sophisticated databases to taildor special offers to particular customers.
He was referring of course to rivals Morrisons and Asda, who rely on money off promotions, vouchers in newspapers and discounts to keep customers happy, in a very US influenced shopping style.
Tesco and Sainsbury’s say they haven’t looked back since launching their loyalty card schemes, both saying that it is all to do with the customer data that is collected.
Nectar recently upgraded its loyalty scheme, investing massively in a system that could actively compete with the type of data mining that contributed so heavily to Tesco’s rise to glory. It is clearly benefiting from this investment. Sainsbury’s CEO King also had plenty of praise for its Catalina run ‘coupon at till’ scheme, where customers are given specially targeted money –off vouchers at the checkout.
King, speaking as Sainsbury’s revealed annual pre-tax profit of £610 million, up 17.5 per cent, said that about 32 per cent of spending at its stores was on promotions, compared with about 37 per cent for the rest of the industry. “We have stayed at about that level”, he said. “That’s about the maximum level customers can get their heads around.”
Sainsbury’s profit before tax rose to £733 million once property proceeds were accounted for. The dividend was raised 8 per cent to 14.2p, with shares rising 10.5p, or 3 per cent, to 338.5p.
The company also announced that it was to establish a property partnership with its pension fund to address its deficit, which stood at £1.2 billion in March 2009.