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Thursday, October 21, 1999 Published at 23:52 GMT 00:52 UK

Business: The Company File

Loyalty cards losing appeal

Many shoppers say they would prefer lower prices

Supermarket loyalty cards are losing their appeal and may be ineffective at retaining shoppers, according to a report.

The BBC's John Moylan: "Loyalty cards do not deliver loyalty"
The study by market research company Mintel found that the number of people with loyalty cards has not increased in the past two years.

[ image: Asda has high customer loyalty but no card]
Asda has high customer loyalty but no card
Their research also found a third of people preferred low prices to points or other incentives.

Loyalty cards were first launched in the UK by the supermarket chain Tesco.

The supermarket brought out their card in 1995 to encourage shoppers to return to their stores to build up points which would lead to discounts on certain items.

Most major retailers copied the idea, and by 1997 75% of all adults had signed up to at least one loyalty scheme.

But the study found there was mixed evidence that the cards really promote loyalty.

The supermarket chains Morrison's and Asda have a higher than average proportion of shoppers describing themselves as loyal - but they do not run such schemes.

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