Asda has confirmed that its Price Guarantee loyalty scheme is “under review” as part of a wider programme by the embattled retailer to return to sustainable growth.
Loyalty schemes have been a hot topic amongst retailers this year, with the majority of the UK’s grocers taking a hard look at how to improve their offering in a bid to woo customers in the competitive sector. However, the Walmart-owned giant has remained relatively quiet on the future of Price Guarantee, until now.
The Drum understands that Asda is not looking to axe the loyalty scheme but is instead reviewing the terms and the way in which it is marketed to customers. It has faced challenges from competitors in the past, with the Advertising Standards Authority previously banning an ad promoting its benefits.
In its current form, the Price Guarantee lets Asda customers compare the cost of comparable grocery items to those in Tesco, Sainsbury's, Morrisons or Waitrose. If the total cost isn't 10 per cent cheaper at Asda, the retailer gives shoppers the difference in the form of a voucher.
However, amid the growing success of Lidl and Aldi – which have for the first time today increased their market share to a combined 10 per cent – supermarkets have grappled with creating a loyalty scheme that can match the consistently low prices driving shoppers to the German discounters.
This year alone has seen M&S introduce a points based reward system in ‘Sparks’, Waitrose roll out ‘Pick Your Own Offers’, Sainsbury’s review its Nectar points allocations, Morrisons overhaul the ‘Match & More’ price promise and Tesco introduce a new immediate cash-back 'Brand Guarantee' scheme.
An Asda spokesperson declined to comment on how many customers currently use Price Guarantee but said the outcome of the review should come in the first quarter of 2016.
The retailer could take inspiration from the likes of Waitrose, which claims 8,000 customers a day are signing up to its alternative scheme which lets myWaitrose card holders choose 10 items they would like a 20 per cent discount on.
The closer inspection of Price Guarantee comes as part as of Asda's wider 18-month review announced last month, dubbed Project Renewal, designed to get Asda back to a “simpler way of doing business” in order to “deliver market leading value in a way customers will notice”.
Chief executive Andy Clark said: “Increasing our focus on the core business means strengthening some areas while pausing activity in others which will allow us to sharpen our customer offer and continue to improve operational efficiency.
“I’m confident that by reinforcing our offer we can further extend our price advantage over major competitors and close the gap against the limited assortment discounters – not only on price, but across range, service and quality.”
This will see it reduce its product range by as much as 10 per cent.
The scale of the challenge was clear with another quarter of disappointing results as it posted a 4.5 per cent fall in like-for-like sales for the 13 weeks to 30 September.