Sainsbury’s launches new Tesco-style loyalty scheme

Sainsbury’s has fired a warning shot at loyalty giant Nectar, which it helped set up in 2002, by launching promotion-led scheme Connections to improve supplier and shopper value.

The supermarket chain denies this will spell the end of its relationship with Nectar, which began four years ago when it folded 10 million Sainsbury’s Rewards records into the scheme. But Sainsbury’s chief executive Justin King has been reviewing the contract ahead of renewal discussions.

Connections will use Nectar cardholders’ data to provide suppliers with an insight into the in-store habits of Sainsbury’s customers; similar to the way Tesco uses its Clubcard data to create offers for shoppers. At this stage there will be no consumer-facing aspect, such as a card or points programme, but Sainsbury’s strenuously denies it is using the launch as a building block to eventually abandon Nectar and return to a standalone operation.

Sainsbury’s mails its Fresh Ideas customer magazine to about 1.5 million regular users of Nectar. One source says Sainsbury’s will “augment” Nectar data – rather than the retailer trying to replace the scheme – and create a wider customer base for suppliers.

Connections is due to be launched in the first quarter of the year and will be backed with a mailing programme to prospective clients. A Sainsbury’s spokeswoman says/ “This is aimed at using the information we get through Nectar more efficiently for our customers – it is reliant on Nectar data.”

A spokeswoman for Loyalty Management UK, which runs Nectar, adds: “We are aware of the Connections programme and that it will be marketed. It will not affect our scheme.”

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