Sainsbury's chiefs rile shoppers by halving Nectar points

15 October 2014 -

Bosses of Britain’s third-largest supermarket have confused and angered customers with sudden announcement that availability of popular reward credits will be slashed by 50%

Jermaine Haughton

Sainsbury’s senior management have taken the risky decision to halve the value of Nectar points, with the likelihood that customers could be spurred to shop elsewhere. From 11 April 2015, shoppers will receive one point per pound spent in store or online instead of two – and points for customers who bring their own carrier bags will also be scrapped.

A spokeswoman for the chain has argued that customers will receive similar value from more regular “bonus events” and increased, personalised points offers – including fuel purchases worth 10 times the number of points, a “Christmas Double-Up” promotion on goods such as toys, entertainment products, seasonal fare and clothing, and one-off competitions. An awareness campaign to inform the public of the deals is currently being drawn up.

The move follows Sainsbury’s announcement of a 2.8% fall in sales in the three months up to the end of September. Following news of that third, consecutive slump in quarterly sales, shares fell by 7%, reflecting investor uncertainty over the retailer. Sainsbury’s management hopes that the Nectar card changes will pave the way for a more engaging loyalty programme and a more compelling marketing opportunity.

Nonetheless, the dramatic cut in Nectar points was met with dismay and anger from social-media using customers, who threatened to take their money to rival brands.

Chris Whitehead wrote on Twitter: “Hey @sainsburys if I enter into a relationship with an agreed expectation of loyalty, then you change it, expect divorce. Hi @Ocado £Nectar”

Anna McNally wrote: “So @sainsburys will no longer be giving me nectar points for reusing my bags but will be giving out extra points on fuel. Sounds very green.” And Emma Gibbs tutted: “Disappointing that @sainsburys has dropped Nectar points for those reusing carrier bags. Should be incentivising people to £recycle.”

In light of the announcement, it is increasingly clear that the British supermarket and retail sector is in a state of flux, with a continued saturation of the market from growing budget retailers such as Aldi and Lidl and the competition from e-commerce outlets changing the landscape. 

Last month, the British Retail Consortium (BRC) reported the weakest underlying performance by high-street and online stores since the depth of the 2008/2009 recession. Pointing to a warm September, the continued weakness of spending in supermarkets and a recent dip in the once rapid growth of internet sales, the BRC said total sales were 0.8% lower in September 2014 than in the same month the previous year.

Image of Sainsbury’s homepage courtesy of Gil C / Shutterstock.