Sainsbury’s Loyalty Triumph: A Lesson for Retailers in 2024?
In the wake of Sainsbury’s impressive festive season performance, Geoff Lloyd, sheds light on the impact of the supermarket giant’s loyalty incentives and the lessons it provides for the industry in 2024.
Last week, Sainsbury’s reported a successful Christmas season, thanking customers for using its loyalty card scheme, Nectar Card, with a 9.3% growth in third-quarter food sales and an 8.6% increase in Christmas grocery sales.
The Nectar Card was used by 90% of shoppers on an £80 weekly shop, resulting in an average saving of £16 on Christmas purchases. However, general merchandise sales were down six percent in the third quarter and 3.7% over Christmas. Despite this, the supermarket maintained its guidance for the year, with an expected underlying profit tax between £670 million and £700 million. Sainsbury’s share price experienced a four percent decline. CEO Simon Roberts expressed confidence in the company’s momentum and announced plans to share an updated strategy in the coming month.
Geoff Lloyd, Vice President, Retail, at NTT DATA UK&I: commented:
“It’s clear Sainsbury’s use of loyalty incentives had a significant positive impact on the grocer’s festive period sales. With grocery numbers swelling 9.3% in Q3 and 8.6% over Christmas, Sainsbury’s proved just how effective loyalty incentives can be in boosting sales and improving customer engagement.
“Sainsbury’s festive period success served as an example of what it can look like for grocers to see success while still rewarding and giving back to customers. The grocer has also surfaced as a leader in fair treatment and recognition of employees, recently raising wages to £12 an hour, up 9.1%.
“In a time where inflation remains high and concerns linger around the cost of living, it’s clear that shoppers are looking for deals through their loyalty programmes. Sainsbury’s success demonstrates the value retailers can achieve, using the data they have available to them, in tailoring deals to customers and creating a unique shopping experience that meets the needs of their customer base.
“Many other retailers have the opportunity in 2024 to understand consumer behaviour and act on it. The key is using data insights, taking advantage of available solutions, and responding in real-time to customers.”