UK retail giant to start reward scheme in US
Clash likely with rival chain over data mining operations
UK supermarket Tesco is to launch a version of its Clubcard loyalty scheme in the US – initially via its Fresh & Easy US discount chain, according to a report in the Financial Times.
The UK version of Clubcard was developed in partnership with data mining and analysis company dunnhumby – Tesco majority owns dunnhumby’s UK unit.
Close co-operation between Tesco and dunnhumby would not seem to be possible in the US as the latter’s American unit is run as a joint operation with Kroger, the US supermarket group which is in direct competition with Tesco’s Fresh & Easy.
Kroger does not run a points-based rewards programme, but has utilized dunnhumby’s data to offer discount coupons to shoppers on the basis of past shopping activities. It has claimed 50% redemption rates on the coupons compared to the industry average of 1-3%.
The US reward scheme launch marks a change of strategy for Tesco, which launched Fresh & Easy three years ago as a store solely focused on delivering the lowest possible price.
Tesco’s US operation has been building up speed with the recent start of its first regional radio and newspaper advertising campaign in September.
Currently there are 130 Fresh & Easy stores all in California. Plans to expand further north in California and into northern Nevada have been postponed, with Tesco citing the depressed state of the economy in the region.
Clubcard was launched in the UK in 1995 and subsequently expanded into the Republic of Ireland, and also at Tesco Extra stores in Malaysia.
Tim Mason, the head of Tesco’s US operation, was a major figure in the UK relaunch of Clubcard in 2005 when he was the company’s marketing director.