A few years ago, the idea of different customers being charged different prices for exactly the same loaf of bread or tub of butter might have sounded a bit… well, wrong. But that has become the norm in some of the UK’s biggest supermarkets. Member-only pricing, where those signed up to a loyalty scheme pay less than those who aren’t, is a fast-growing trend.
We've tracked the pricing history of dozens of member-only offers at Tesco and Sainsbury's over six months, and found that almost a third were at their so-called 'regular' price for less than half that time.
We've shared our findings with the Competition and Markets Authority.
Can you trust loyalty prices?
So are these loyalty discounts really about rewarding faithful shoppers or simply a ploy to grab – and make money from – your data? Do members make a genuine saving, or do non-members end up paying more than they should?
We looked at 141 Clubcard and Nectar Price offers promoted on the websites of Tesco and Sainsbury’s at the end of June and tracked their pricing history back six months to see how they compared. This unearthed some seemingly dodgy-looking pricing tactics.
Over the six months, 29% of the member-only promotions across both supermarkets were at their so-called ‘regular’ price less than half the time. At Tesco, it was 24% of the 70 products we looked at, at Sainsbury's it was 34% of 71 products.
Our investigation uncovered a string of particularly dubious deals, including the following at Sainsbury's:
Andrex Classic Clean (nine rolls) at Sainsbury's - Nectar price £5.25, regular price £6.25.Cadbury Dairy Milk (four x 33.5g bars) at Sainsbury's - Nectar price £1.50, regular price £1.65.Nescafe Gold Blend (200g) at Sainsbury's - Nectar price £6, regular price £8.10. Quaker Oat So Simple Original Sachets (10 x 27g) at Sainsbury's - Nectar price £2.50, regular price £3.50.These were some of the worst examples we found at Tesco:
Heinz Salad Cream (605g) at Tesco - Clubcard price £3.50, regular price £3.90.Persil 3 in 1 Non-Bio (50 washes) at Tesco - Clubcard price £10.80, regular price £12.Blue Dragon Sweet Chilli Sauce (380g) at Tesco - Clubcard price £2, regular price £2.70.Jammie Dodgers (140g) at Tesco - Clubcard price 65p, regular price 80p.So are supermarkets hiking their ‘regular’ prices to make loyalty scheme customers feel they’re getting a discount, when actually non-members are simply paying over the odds?
Our research suggests instances where supermarkets are using potentially dodgy tactics on loyalty offers, which can give the impression that savings are more substantial than they really are.
Which? is calling on the supermarkets to make sure every non-member price is genuinely reflected so that savings are meaningful. If you’re signing away your data to access them, this is the least you should expect.
Find out more:Are these prices too exclusive?
Member-only pricing is by definition exclusive: you must, of course, be a member of the supermarket’s loyalty scheme to get the discounts. But not everyone can – or wants to – sign up to these loyalty schemes.
There are age and address-based restrictions, and those with limited access to digital devices may also miss out. For example, you must be 18 or over to be a member of the Asda, Iceland, Lidl, M&S, Sainsbury’s, Tesco, and Waitrose loyalty schemes, and 16 or over at Morrisons.
Sainsbury’s does let under-18s collect points using a parent or guardian’s account. Co-op offers a scheme for under-16s if a parent or guardian helps sign them up.
Members must also be a 'UK resident' to join the Iceland, M&S, Morrisons, Sainsbury’s, Tesco and Waitrose schemes; some require an email address or the ability to download an app.
This means those who are too young, don’t meet the address requirements or don’t have access to the technology needed can’t access discounts that were previously available to everyone. This includes vulnerable groups, such as teenage parents, young carers, school children buying lunch, homeless people and those in temporary accommodation.
Some people may not want to share their data with supermarkets or lack trust in how it will be used. These shoppers too are now denied access to discounts that used to be universal.
Find out more:Do loyalty schemes save you money?
Launched four years ago, Tesco’s Clubcard Prices (of which there are now over 8,000) are probably the best-known example of member-only pricing – and are now the only promotions the supermarket giant offers. Sainsbury’s rolled out its new Nectar Prices - which now total 3,500 and rising - to much fanfare this spring.
Boots, Co-op, Marks & Spencer, Morrisons and Superdrug have also recently launched similar schemes.
While Tesco Clubcard and Sainsbury’s Nectar prices still don’t beat Aldi or Lidl on the overall price of a basket of groceries, they are hot on their heels. Indeed, we found the average saving on a member-only offer is 21%.
In our survey*, 20% of those who’d noticed member-only pricing said it had led them to shop at their supermarket more frequently than before. But as our research shows, these 'savings' may not be as impressive as they sound.
Find out more:What's your data worth?
These schemes are big business. The general model, followed by Sainsbury’s and Tesco, is to aggregate customers’ data and share it with other organisations.
Nectar360, Sainsbury’s data arm, is forecast to make £90m profit by early 2026. It boasts of offering ‘billions of rows of transactional data’ to more than 700 brands to ‘help them understand and engage with their customers’.
Tesco’s data science business is called Dunnhumby and, in the words of group chief executive Ken Murphy, it helps Tesco ‘access new revenue streams from Clubcard’. The Tesco Media and Insight Platform launched last year and helps 450 brands ‘increase the effectiveness of their campaigns’. Indeed, Clubcard claims to be the UK’s largest source of first-party behavioural data.
This can result in shoppers receiving targeted emails, social media posts and other ads, as well as personalised offers from the supermarket itself.
In a leaked transcript of a Nectar event held in 2021 for investors and analysts, executives said that ‘price-sensitive’ shoppers are offered fewer but deeper discounts, while loyal customers get discounts across a broader range of products – including tempting pricier options.
Find out more:'Almost forced into membership'
Solent University lecturer and data specialist Garfield Benjamin says: ‘You wouldn’t just hand over your receipt to someone in the street to show them what you’ve been buying. But that’s what you’re doing. There is potentially sensitive data there – pharmacy, sexual health products. You don’t realise how many of our habits are in our shop. They know where you work, when you go to the office, when your kids are ill.
'The change towards member-only pricing really means people are likely to feel they have less choice about signing up.’
In our survey, 25% of respondents said their store’s use of their data was unclear. Many shoppers love the discounts either way – indeed, 69% are willing to exchange their data for discounted prices. But others are more wary, with 26% saying they’re uncomfortable knowing supermarkets collect detailed data via schemes.
One said, ‘Some of the non-member pricing is so ridiculously high you’re almost forced into taking up membership to get a normal price.’
Find out more:What the supermarkets say
We put our findings to Sainsbury’s and Tesco.
Sainsbury’s said, that due to inflation, many products had increased in price over the past six months and Sainsbury’s own inflation rate had been behind many of its competitors.
It added: ‘We make every effort to be transparent about how customer data is used at Nectar. Customers can find more information on this in the privacy policy on our website.’
Tesco said all its Clubcard Price promotions followed strict rules, including looking at how they compared against prices at other supermarkets, to ensure they represented genuine value and savings. It said these rules had been endorsed by Trading Standards.
*We asked 2,000 members of the public about supermarket loyalty cards in July 2023. Results weighted to be nationally representative.
source https://www.which.co.uk/news/article/which-uncovers-dodgy-looking-supermarket-loyalty-discounts-a4vrY7w7nVNh