Supermarket loyalty 'challenges' could lead to overspending, warns

Consumer groups have warned that new supermarket “challenges” which offer shoppers extra points for buying more could lead to overspending.

The UK's four biggest supermarkets – Tesco, Sainsbury's, Asda and Morrisons – currently offer members of their loyalty programmes bonus points if they hit spending targets.

All supermarkets claim their schemes allow them to offer customers greater value and more personalised savings.

But consumer group Witch? and debt relief charity Step Change warned that setting shopping challenges could encourage people to spend beyond their budget.

These challenges are the latest developments in supermarket loyalty card schemes that are becoming increasingly sophisticated.

At the same time, food prices rose nearly 20 percent annually last year, the highest since the 1970s and are only now reaching new highs. Return to “more normal” rates.

“Supermarkets are very competitive at the moment, and they're all loudly advertising their discounted products,” says Elle Clark, retail editor at Which?, “but the fact remains that food in general is still a lot more expensive than it was a few years ago.”

Ged Hutter, a former Asda buyer who now advises suppliers on how to negotiate with retailers, said individual prices and challenges were simply a way for supermarkets to compete for customers.

“They look at what products you buy during the month and give you offers to ensure you buy those products again,” he said.

Challenges vary by supermarket and may include shopping more frequently or hitting spending targets on specific items within a set time frame.

Jo Luke, a single mother of three from Manchester, told the BBC that shoppers “need to tread carefully” when it comes to loyalty card challenges and missions.

“The word 'challenge' can make it feel like a game, and if you're someone who gets caught up in this kind of thing, it can be quite dangerous,” she said.

Luke, who shares his tips for saving money on grocery shopping on his @thismumcooks social media account, I don't think the Supermarket Challenge will encourage her to shop more at any one store.

“I don't think it pays to be a loyal customer. I think it pays to shop at all the supermarkets in your area,” she said.

According to data from research firm Kantar, the average person has three supermarket loyalty cards.

• Find out the price: Understand the prices of the products you buy regularly and distinguish between good and bad deals
• Compare prices per 100g: Look for similar items along the shelves as the Royalty price may not be the cheapest option.
• Set a budget and stick to it. Supermarket coupons and challenges often require you to spend more money, so try not to overspend.
• Stock up: If you want to take advantage of discounts, buy long-lasting staples like pasta, rice and canned goods in bulk.
• Leverage technology: Use the independent supermarket comparison app to save your favourite items and get notified when the price drops.

Which?'s Clarke told the BBC: “With many families struggling to make ends meet, it's important that supermarkets don't overplay the issue and encourage shoppers to spend more than they earn in order to earn points.”

The consumer group previously The prices on Sainsbury's and Tesco's loyalty cards weren't as good as they looked. The Competition and Markets Authority has announced a review into royalty pricing by supermarkets in January 2024.

The committee is looking at whether loyalty prices are genuine promotions or may mislead shoppers, whether they disadvantage certain groups and whether they affect shopping habits and the way supermarkets compete with each other. An update on its findings is due to be published in July.

“Retail loyalty schemes can offer customers valuable discounts, but incentivising spending comes at the risk of leading them to spend more than they had originally planned or budgeted,” said Simon Trevethick, Step Change's communications director. Contact a charity.

The BBC has asked Tesco, Sainsbury's, Asda and Morrisons to respond to concerns that loyalty challenges could encourage overspending.

A Tesco spokesman said the company's challenge was to “reward customers for the products they buy regularly”.

Sainsbury's said bonus points will be issued “based on the number of stores customers visit, with a minimum eligible spend of £1 per store”.

Asda and Morrisons did not respond.