Supermarket loyalty cards under fire, Consumer NZ says cheaper groceries available elsewhere

Some supermarkets have loyalty cards - and those which don't sometimes have better deals, Consumer NZ says. Photo / John Borren

A consumer group says supermarket loyalty card specials are not so special - and many items could be found for cheaper at stores with no loyalty schemes.

But Foodstuffs rejected the claims, saying many people prefer shopping in one place, and its New World Club Deals could save shoppers nearly 20 per cent on groceries.

Woolworths also hit back this morning, saying its Onecard did offer dedicated specials, and also gave members access to fuel discounts and food vouchers.

Consumer NZ said it assessed prices for 48 products with a Onecard or Clubcard discount, and which were also available at Pak’nSave and The Warehouse, neither of which use a loyalty discount scheme.

“Three-quarters of the loyalty discounted products we looked at were available at an equal or lower price by shopping elsewhere,” said Gemma Rasmussen, Consumer NZ head of research and advocacy.

The group said a Moccona coffee refill was $11 at Countdown using a Onecard but Pak’nSave had the same item for $8.

Consumer NZ said a one litre sparkling water product it looked at cost $1.79 at New World with a Clubcard but was just 97c at The Warehouse.

The consumer group said it tested prices for the four dozen items at Auckland and Wellington supermarkets over a one-month period.

“Time and time again we found The Warehouse or Pak’nSave were considerably cheaper than the so-called special pricing offered to loyal customers of New World or Countdown,” Rasmussen said.

Consumer said a poll of its “supporters” found 95 per cent were tempted to some degree by specials.

“Supermarkets understand the persuasiveness of a ‘special’ or ‘loyalty deal’ and we are concerned shoppers are paying more than they need to because of this,” Rasmussen said.

“It is questionable whether the supermarket loyalty ‘specials’ are actually good deals when the same products can consistently be found cheaper elsewhere.”

Consumer NZ said shoppers should be sceptical about the value of loyalty cards and where possible consider using online grocery price-comparison tools.

“We are not suggesting that people hop between stores to stock their pantry, but our analysis backs up our long-held belief that there is little, if any reward, in being loyal to one chain or store.”

Foodstuffs spokesperson Emma Wooster said local grocers owned New World stores, and had flexibility to tailor their range to suit the needs of their customers and community.

“New World’s customers tell us they enjoy the range, shopping experience and Clubcard benefits that come with shopping instore and online.”

She said Clubcard delivered benefits apart from savings on groceries, including opportunities to enter competitions, access to exclusive giveaways and options to earn Flybuys, Airpoints Dollars or New World Dollars.

“It’s really great to see that Pak’nSave, with its value-focused offer, came in at the lowest price of all in Consumer NZ’s shops,” Wooster added.

A Woolworths spokesperson said Countdown did not take its three million weekly shoppers for granted, and was committed to delivering good value for them.

“One of the ways that we do this is through our loyalty programme which provides value not only through dedicated specials, but also by giving members access to fuel discounts or to earn food vouchers.”

From February next year, Countdown’s Onecard will be no more, as Woolworths brings in a new Everyday Rewards loyalty programme.

Data sharing

Consumer NZ today also criticised loyalty card programmes through the amounts of customer data the schemes collect.

“Some data collected via a shopper’s loyalty card is pushed into a larger data ecosystem, then used to serve that shopper with targeted advertising from third parties,” the consumer group said.

Foodstuffs this morning said it did not share or sell New World Clubcard holders’ personal information.

A Woolworths spokesperson last month told the Herald such data was only shared with partners for the purposes of administering the programme.

Woolworths today said it did not sell Onecard customer data and would not be selling information from Everyday Rewards.

The company said it had already updated loyalty card terms and conditions, after a Commerce Commission’s recommendation, to make it easier for customers to understand how personal data might be used.