British supermarket group Tesco has announced it’s offering a loyalty subscription plan for customers, in an attempt to stay competitive with German-owned discounters.
Reuters is reporting that Tesco will be the first major supermarket group in Britain to offer a loyalty subscription. The grocery market in Britain has lately been dominated by Aldi and Lidl, companies that have been opening stores at an impressive clip.
Tesco, Sainsbury’s, Asda and Morrisons are all trying to maintain market relevance. Those stores have been offering discounts and Tesco said it was going to launch an enhanced version of its Clubcard scheme on Nov. 8.
All of the 19 million Clubcard subscribers will have the option to upgrade to Clubcard Plus for £7.99 (a little more than $10) a month. The program offers loyalty points for discount vouchers, and 10 percent off two visits to the store a month, at a total of £200, which comes out to about £40 in savings a month.
The loyalty plan also offers customers the chance to get a 10 percent discount off in store brands like F&F, Go Cook, Tesco Pet and Fox & Ivy, and they’ll be able to get twice as much data from Tesco Mobile. As an added perk, customers will be able to apply for a Tesco Bank credit card without any foreign exchange fees.
Tesco said Clubcard Plus members will be able to save over £400 every year. While some analysts say that the move could give increase sales for Tesco, they were not certain how it would affect profit.
The news comes as eCommerce giant Amazon has entered more deeply into the grocery market with the announcement that Amazon Fresh is now free for Prime members.
Amazon said its Fresh option provides free “ultrafast” grocery delivery. It was previously available for $14.99 a month.
VP of Grocery Delivery Stephenie Landry said in the announcement, “Prime members love the convenience of free grocery delivery on Amazon, which is why we’ve made Amazon Fresh a free benefit of Prime, saving customers $14.99 per month.”
Landry continued, “Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits.” The firm pointed out that members now get fast as well as free grocery delivery from Whole Foods Market and Amazon Fresh.