Supermarkets including M&S, Tesco and Sainsbury’s have been crediting their strong festive sales to popular loyalty schemes, strategic pricing and popular Christmas adverts.
Sainsbury’s – which has emerged as the winner in the ‘battle of the big four’ after posting an 8.6% increase in like-for-like grocery sales over the six-week period – credited the jump in sales to its its “focus on value”.
The grocer’s 2023 Christmas spot was a direct attempt to tackle the British public’s concerns over high supermarket prices.
Tesco also praised the success of its Christmas ad in helping boost its own like-for-like sales figures by 6.9% over the period. On an earnings call this week, CEO Ken Murphy said that the brand’s BBH-designed Christmas spot “worked really well”.
Murphy went on to reveal that the film’s late release date was a deliberate ploy to boost coverage, adding that strong sales figures had given the firm “licence to innovate” in terms of its advertising strategy.
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Loyalty schemes have played an important part in grocery retail over the past quarter, with Sainsbury’s CEO Simon Roberts saying the supermarket’s successful Christmas was “powered by Nectar Prices”.
The loyalty card was used on 90% of weekly shops over the quarter.
However, the Nectar scheme has since come under fire, with Roberts forced to defend the loyalty programme following the launch of a CMA investigation into whether such schemes offer genuine savings, or simply massage prices to give that impression.
“We have very clear rules about what a price is, what it is before it comes down to being a Nectar Price, and we’re very consistent about how we do that,” Roberts said.
Also looking closely at its loyalty programme is M&S, after reporting a hugely successful Christmas which saw like-for-like food sales rocketing by almost 10% and sales of its “Remarksable Value” offer surging by 18% over the period.
Since then, CEO Stuart Machin has ruled out launching member pricing in the style of Clubcard or Nectar pricing, saying instead that the retailer “needs to rethink Sparks over the short, medium and long term”.
The CMA will be reviewing supermarket loyalty schemes as part of its investigation, which centres around the promotional prices offered to customers who agree to sign up to the membership and loyalty schemes.
