Tesco to launch Clubcard Plus subscription next week

The supermarket giant’s new loyalty salvo, which it unveiled details of earlier this month, will be available for new and existing Clubcard holders from November 8 for £7.99 per month.

Members of the subscription service will benefit from 10% off two big in-store shops worth up to £200 each per month, as well as 10% off Tesco’s own-brand clothing and general merchandise proposition, including F&F, Fox & Ivy and Go Cook, all year round.

Clubcard Plus members will also receive double data on their pay monthly Tesco Mobile deals and be able to apply for a Tesco Bank credit card with no foreign exchange fees on overseas purchases.

In a trial with almost 75,000 of its staff, Tesco said average basket spend in stores increased by an average of £8.68. Subscribers also engaged with an average of two of Tesco’s businesses, compared to 1.5 prior to joining the subscription service.

The move comes are retailers attempt to redefine their loyalty programmes to better key into consumer spending habits.

Tesco’s big four rival Sainsbury’s revamped its Nectar scheme last year, rewarding customers based on how long they have shopped with the business and how frequently they do so, rather than just looking at how much they spend.

Nectar users are also sent unique offers based on the items they purchase most often in Sainsbury’s supermarkets, convenience stores or online.

Earlier this month, Sainsbury’s took the scheme digital through a new-look smartphone app.

Tesco will kick-start a marketing push for Clubcard Plus from Monday, with a TV advert playing on a famous scene from the film Casablanca. The grocer will also unveil a number of playful print and digital ads, featuring former tennis player John McEnroe, beefeaters and the Queen’s corgis.

The grocer already reaches around 19 million UK households through its existing Clubcard loyalty scheme, with 60% of Britain’s population using a Clubcard.

Tesco boss Dave Lewis said adding the subscription element was designed to key into the needs of its customers, rather than an attempt to slow the progress of its fast-growing discount rivals.

“This is about rewarding loyalty. If you reward loyalty, people will reward us with their loyalty, and then for sure, you will see that in market share,” Lewis said. “But the critical thing is that we are thinking about this through the customer’s lens, rather than a competitor, market share lens.”

Lewis refused to be drawn on how much the introduction of the scheme could cost Tesco. The grocer says that families could save up to £400 a year when a subscription would cost them just £95.88 for 12 months.

“We won’t know what the impact of this is until we do it because there’s no way of testing it at scale until you actually do it,” Lewis said.

“We have three different scenarios in terms of the levels of adoption, how many people take it up and over what time frame. In each of those, there are different assumptions in what the change in behaviour might be. There are a very big set of permutations as to what the outcome could be.

“But what we think is strategically important for us is having more of the large basket shop within Tesco. We know that that’s what our customers want, so we can see what the profitability is of a large basket is and offset that against some of the investment that we are making.”