Sainsbury's halves Nectar points payout

Sainsbury's has made its Nectar points scheme half as generous. Is this the end for loyalty cards?

Updated: 
Nectar reward points halved

Sainsbury's has dealt a horrible blow to loyal customers - by halving the generosity of its Nectar reward scheme. Since Saturday, Sainsbury's shoppers have only received one point for every £1 spent in store (instead of two) - and there aren't any extra points for using your own bags. The question is whether it will drive customers into the arms of its competitors.

Points are worth half a penny, which means shoppers now only receive 1p in points for every £2 they spend. They also get a point for every litre of fuel they buy. If they earned all their points through the supermarket, they would need to spend a staggering £1,000 in order to earn £5.

You can boost the points you earn on special promotions. You can also earn double points by booking through Expedia. Until 10 May, Sainsbury's is also offering 10 points for every litre of fuel you buy.

You can increase the value of your points by up to 100% by spending them at other partners, including cinemas and restaurant chains.

How does it compare?

When you compare this to the Clubcard scheme at Tesco, Clubcard is better on every level. Tesco offers 1 point for every £1 spent in store or online. Each point is worth 1p in Tesco, double during promotions, and up to 4p with certain reward partners - including several restaurant chains.

It means you need to spend £500 to earn a voucher for £5 - or a voucher for £20 if you choose your rewards wisely.

At the moment, these are the only two supermarket loyalty cards to work this way. Morrisons only offers points if your shopping costs more than it would have at Tesco, Sainsbury's, Asda, Aldi or Lidl. You get 1p of points for every 1p you overpaid for your shopping.

Waitrose, meanwhile, doesn't offer points. Instead you get access to special offers, you are entered into a monthly prize draw, you can pick up a free newspaper with your shopping (assuming you spend enough to qualify) and you can get a free tea or coffee every day to take away.

Is this the end of loyalty schemes?

Some commentators argue that the death of the weekly shop sounded the death knell for these schemes anyway, as shoppers ditched any idea of loyalty in pursuit of lower prices. They highlight that as the schemes cannot buy loyalty, they aren't achieving anything for the supermarkets any more, so it's only a matter of time before they are ditched.

The discounters and Asda have chosen not to get into the loyalty business. They argue that shoppers pay for the running of the scheme though marginally higher prices, and they'd rather offer lower prices.

However, there are still plenty of people who love a loyalty scheme. According to analysts at Conlumino, 90% of people use them regularly, and a YouGov survey last year found that 36% of people were using the cards more in an effort to get more value for their shopping.

Given that the higher cost of living has made some shoppers more focused on loyalty schemes, Sainsbury's is taking a risk by slashing Nectar's payouts. It's understandable, given the pressure on retailers to cut costs, but it could prompt shoppers to reconsider whether they should go to Tesco for more points or the discounters for lower prices.

But what do you think? Do loyalty schemes make any difference to where you shop? And will this put you off shopping at Sainsbury's?

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