UK to get 'biggest' loyalty card scheme

Sainsbury: Hoping for rewards from Nectar

The founder of the Air Miles scheme is to come to the aid of four famous High Street names, through what is claimed will be the UK's largest ever loyalty card programme.

J Sainsbury, Debenhams, BP and Barclaycard are to transfer their in-company loyalty schemes to a joint programme launched this autumn, a statement on Wednesday said.

The joint card, called Nectar, will be run by Air Miles founder Keith Mills, and is expected to sign-up half of UK households.

The card will be useable at 1,800 stores run by the four firms, with further retailers expected to join the programme in the future.

Points will be exchangeable for "rewards" such as consumer goods, flights, holidays, meals and cinema tickets.

Points fatigue

The move represents a u-turn for the UK retail sector, which in recent years has moved away from loyalty cards, over concerns that they fail to attract new customers.

Supermarket giant Safeway two years ago famously scrapped its loyalty card programme, claiming customers preferred immediate discounts to points.

"People have lost interest in [loyalty card] points and don't think they give value," chief executive Carlos Criado-Perez said at the time.

Cost savings

But Sainsbury last week revealed the value of a successful loyalty card scheme by admitting that the loss of its Air Miles offer to rival supermarket giant Tesco had hit sales growth.

And the joint card it designed to see points rack up more quickly, encouraging participation, besides helping the four retailers cut the cost of administrating their stand-alone schemes.

"In the new scheme, our customers will be able to earn points faster from a larger number of retailers, accessing a greater value of rewards," BP retail chief Graham Sims said.

Nectar will be run by the UK arm of Mr Mills' Loyalty Management International firm, which is reported to be preparing to spend £50m launching Nectar.