Warning grocery store loyalty ‘challenges’ may trigger overspending | EUROtoday

New grocery store “challenges” that reward consumers with additional loyalty factors for purchasing extra may result in overspending, client teams have warned.

Four of the UK’s largest supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – at the moment are providing members of their loyalty schemes bonus factors in the event that they hit spending targets.

The supermarkets all say their schemes provide clients higher worth and extra personalised financial savings.

But client group Which? and debt charity StepChange warned that setting procuring challenges may encourage folks to spend greater than they will afford.

These challenges are the newest growth in grocery store loyalty card schemes which have gotten ever extra refined.

At the identical time, meals costs had been rising at an annual price of virtually 20% final yr – the best for the reason that Seventies – and are solely now returning to “more normal” charges.

“Competition between supermarkets is fierce at the moment, with all of them shouting about the number of prices they’ve dropped,” stated Ele Clark, retail editor at Which?. “But the fact remains that overall food is still far more expensive than it was a couple of years ago.”

Ged Futter is a former purchaser for Asda and now advises suppliers on the way to negotiate with retailers. He stated personalised costs and challenges had been merely a method for supermarkets to compete for purchasers.

“They’ll look at products you buy during the course of the month and then they will give you offers to make sure that you buy that product again with them,” he stated.

The challenges fluctuate between supermarkets and contain procuring extra incessantly or hitting a spending goal on particular merchandise inside a set timeframe.

Jo Rourke, a single mum-of-three from Manchester, advised the BBC consumers “need to act with caution” relating to loyalty card challenges or missions.

“The terminology of ‘challenges’ could make it feel like a game and if you are someone who gets drawn into this kind of thing it could be quite dangerous,” she stated.

Ms Rourke – who shares tips about how to save cash on the meals store on her @thismumcooks social media accounts – stated she did not suppose grocery store challenges would encourage her to do extra of her procuring in a single retailer.

“I don’t think it pays to be a loyal customer. I think it pays to shop in all of the supermarkets in your area,” she stated.

The common particular person has loyalty playing cards for 3 supermarkets, information from analysis agency Kantar suggests.

• Learn costs: Get to know the price of the objects you purchase often so you possibly can spot what is an efficient provide and what’s not
• Compare value per 100g: Look alongside the shelf at comparable objects as loyalty costs won’t be the most affordable choice.
• Set a funds and stick with it: Often grocery store vouchers or challenges would require you to spend extra so do not be tempted to overspend
• Stock up: If you do need to reap the benefits of a money-off voucher then bulk purchase staples like pasta, rice or tinned meals which have a protracted shelf life
• Use tech: Use unbiased grocery store comparability apps to avoid wasting your favorite objects and get alerts after they go down in value

Ms Clarke at Which? advised the BBC: “With many households struggling to make ends meet, it’s necessary supermarkets don’t go overboard with these challenges and encourage consumers to spend past their means with a view to entry rewards.”

The consumer group has previously claimed Sainsbury’s and Tesco loyalty card prices were not as good as they seem. The Competition and Markets Authority announced a review of loyalty pricing by supermarkets in January 2024.

It is examining whether loyalty prices are a genuine promotion or could mislead shoppers, if they put any groups at a disadvantage and whether they impact shopping habits and how supermarkets compete with each other. An update on its findings is expected in July.

Simon Trevethick, head of communications at StepChange, said: “While retailer loyalty schemes can present useful reductions for purchasers, there’s a danger that if spending is incentivised, folks could find yourself spending greater than that they had initially deliberate or can afford.” He urged anyone in financial difficulty to contact the charity.

The BBC asked Tesco, Sainsbury’s, Asda and Morrisons for their response to concerns that their loyalty challenges could encourage overspending.

A Tesco spokesperson said its challenges were “all about rewarding clients for purchasing the merchandise they often buy”.

Sainsbury’s said bonus points were “issued primarily based on the variety of outlets clients full, with a minimal qualifying spend of £1 per store”.

Asda and Morrisons didn’t reply.