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Working Lunch Wednesday, 5 June, 2002, 14:18 GMT 15:18 UK
Nectar hopes to keep customers sweet
A shopper collects supermarket reward points
Nectar promises more reward card choice for customers
Britain will get its biggest ever loyalty card scheme when Sainsbury's, Debenhams, BP and Barclaycard merge their schemes under one brand this autumn.

According to the companies behind the scheme about half of the UK, some 12.5 million households, are expected to sign up for the new card, which will be called Nectar.

The scheme will be run by Keith Mills, founder of Air Miles, the world's biggest loyalty scheme.

He says: "Customers will be able to earn substantially more points because they'll be pooling them from different retailers."

Companies joining:
Sainsbury's
Debenhams
BP
Barclaycard

The card will be accepted at 1,800 stores run by the four companies and the network is likely to grow as more retailers join in the future.

Rewards

Points will be exchangeable for "rewards" such as groceries, consumer goods, flights, holidays, restaurant meals, family days out and cinema tickets.

News of the mega scheme has surprised UK retail analysts.

In recent years there has been a move away from loyalty cards following concerns that they fail to attract new business.

Two years ago Safeway cancelled the loyalty card scheme in all its supermarket stores, insisting that customers prefer immediate discounts at the till to points on a card.

Exclusive

Mr Mills launched the original Air Miles concept, which swapped loyalty points for airline flights, in 1987.
Sainsbury's current reward card
Sainsbury's is joining the new loyalty scheme

Its popularity has gone from strength to strength - the total value of Air Miles makes the loyalty scheme the world's second largest currency behind the US dollar.

While Nectar is promising new members, it has said that it will not be an open club.

Competitors to the current Nectar members will be excluded.

Sales

Sainsbury's has been keen to find a new loyalty scheme after it lost the rights to offer Air Miles as part of its reward card package.

The company said the value of a successful loyalty programme can be measured by sales figures and admitted that its business had been hurt by the loss of Air Miles to its arch rival Tesco.

Richard Perks a retail analyst at Retail Intelligence, disagrees that reward cards offer any benefit to supermarkets.

He asks: "Does the fact that you can get points at Debenhams make you want to shop at Sainsbury's more? I just don't see it."
Air Miles founder Keith Mills is launching the new loyalty scheme
Keith Mills, Loyalty Management UK

50m launch

Nectar hopes to encourage participation by letting customers tally up points quicker than other cards.

For the companies adopting the scheme it also has the advantage of shared administration costs.

BP retail chief Graham Sims said: "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,"

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

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