Relationship Marketing Strategy and implementation

been shelved and that it was looking at a loyalty card close to the Clubcard
Plus scheme. Commentators were divided about their wait-and-see stance,
some believing that Asda had waited to learn from the mistakes of its
rivals, others believing that it was too late in entering the market, whilst
others pointed to the latest research commissioned by Checkoutmagazine,
which questioned any justification of loyalty schemes at all. In a survey of
990 adults, two-thirds professed to have a loyalty card but a further two-
thirds expressed a strong preference for lower prices rather than card
schemes. One of the research team pointed out that ‘you have high levels
of holding and using, especially amongst the prime target of heavy grocery
spenders, but it appears cards are not influencing people’s behaviour’.
Replying to its critics, an Asda source remarked that, ‘you can pull out of
a loyalty scheme and replace it with home delivery, catalogue schemes and
other devices but you can’t pull out of a bank that easily. I think retailers
will get out of financial services and loyalty cards in three years, by when
they will have the lists.’
Tesco took the opportunity of its rivals’ troubles and deliberations to call
a press conference in late January 1997 to announce strong Christmas
trading figures which showed like-for-like sales up by 7.5 per cent. Total
sales growth in the period was even greater, at 13.1 per cent. Only two years
after analysts had so readily marked down Tesco shares after the launch of
Clubcard, they were having to eat their words. Tables 2.3.2 and 2.3.3 show

94 Relationship Marketing

Table 2.3.2 Food retailers:Turnover and pre-tax profits, 1992–97 (£ million)

Year ending 1992 1993 1994 1995 1996 1997

Tesco

Turnover 7097 7581 8600 10 101 12 094 13 887

Pre-tax profits 545 558 435.5 551 675 750

J. Sainsbury

Turnover 8695 9685 10 583 11 357 13 499 14 312

Pre-tax profits 628 732.8 368.8 809.2 712.2 609

Safeway

Turnover 4729 5196 5608 5815 6069 6589

Pre-tax profits 364.5 417.3 361.8 175.6 429.4 420

Asda

Turnover 4529 4614 4882 5285 6042 not

Pre-tax profits –364.8 142.1 –125.9 257.2 311.5 available

Kwik-Save

Turnover 2391 2651 2800 2992 3254 not

Pre-tax profits 74.3 126.1 135.6 125.5 2.8 available

Source: Reuters Business Briefing.