Clubcard data in the driving seat as Tesco profits surge

Tesco has hailed soaring membership and penetration of its Clubcard loyalty scheme – which is now used by over 80% of UK households – after reporting robust half-year financial results, with pre-tax profits increasing by nearly 20% to £1.39bn, and revenues up 4% to £31.5bn.

The scheme has witnessed exponential growth since Tesco made major changes in 2020, when it had around 14 million members. There are now 23 million out of a total of 28.3 million UK households signed up to the programme.

This, along with increased digitalisation, has allowed Tesco to collect more data, enabling more personalised solutions for its customers. Tesco claims Clubcard is saving customers up to £385 off their annual grocery bills.

In addition, Clubcard sales penetration is up in all markets year-on-year: UK 82%, ROI 85%, Central Europe 87%; while 4.9 million customers received ‘Clubcard Challenges’ tailored to their shopping habits during H1.

And, through DunnHumby, Tesco has launched an AI-powered range curation tool, enabling improved tailoring of its store offer to local shopping habits.

Meanwhile, the Tesco Media & Insight Platform division has agreed partnerships with WPP and Publicis to leverage their combined expertise and reach across a broader pool of advertisers.

There are now more than 4,000 digital in-store screens; with more than 7,600 campaigns delivered in the first half, with 91 brands participating in its ‘Summer of Sport’ event.

Tesco chief executive Ken Murphy said: “We’ve been working really hard to offer our customers the best possible value, quality, and service and they are shopping more at Tesco as a result. We have lowered prices on thousands of lines, launched or improved over 860 products in partnership with our suppliers and growers, and our customer satisfaction scores continue to improve across a broad range of measures.

“The combination of price, quality and innovation means we are as competitive as we have ever been, and we have been the cheapest full-line grocer for nearly two years. Our strong UK and ROI market share gains across the last year demonstrate our continued momentum.

“I want to say a big thank you to all my Tesco colleagues for their hard work serving customers so well. As we approach the Christmas season, we are looking forward to sharing the quality of our festive food with customers, and can’t wait for them to taste it.

“We are in good shape, with volume growth delivering strong financial performance. This builds on our track record of delivery for all our stakeholders. Our strong momentum allows us to continue to focus on value, quality, innovation, and the broader customer experience, whilst investing in growth opportunities in a disciplined, returns-focused way.”

The supermarket has raised its profit forecast for the year, now expecting to achieve £2.9bn in retail adjusted operating profit, up from an earlier estimate of “at least” £2.8bn.