Loyalty has played a key part in driving strong Christmas performances for grocers Tesco, Sainsbury’s and Co-operative Group.
Oriel Securities analyst Jonathan Pritchard said loyalty was a “tactical weapon” over the period.
Tesco sent out an extra mailing of vouchers before Christmas and also ran double points Clubcard offers.
Tesco UK like-for-like sales excluding petrol and VAT rose 4.9% for the six weeks to January 9, while Sainsbury’s like-for-like sales excluding petrol and VAT climbed 4.2% in the 13 weeks to January 2. Sainsbury’s festive update figures did not include the contribution from its Nectar card vouchers, but Tesco separated out its Clubcard contribution out, saying it accounted for 0.7% of the UK like-for-like figure.
Co-op reported like-for-like sales including VAT and excluding petrol up 5% in the three weeks to January 2, and 4.8% in the 12 weeks to January 2. The grocer launched a £200m promotional package for Christmas, which included its first triple dividend scheme.
Tesco executive director, corporate and legal affairs Lucy Neville- Rolfe said: “Clubcard worked well but we also had great promotions, plus extended our ranges of things like electricals and toys.”
The Government has this week accepted the Competition Commission’s recommendation for a supermarket ombudsman. A consultation on the creation of an ombudsman and its powers will start next month, soon after the groceries supply code of practice comes into force on February 4. The British Retail Consortium hit out at the decision, saying the balance of power will tip in favour of manufacturers and drive up prices.