Clubcard loyalty bonanza fires up Tesco profits to £2.3bn

Tesco has hailed its Clubcard strategy as a major driving force behind a 159% increase in pre-tax profits to almost £2.3bn, with sales rising 7.4% to almost £61.5bn fuelled by an increase in market share.

The supermarket giant expects to make at least the same level of profits in the year ahead amid plans to bring in efficiency savings worth £500m, including a robot-led distribution centre for fresh produce and fitting 100 stores with solar panels over the next three years.

Tesco said there were now 8,000 products with Clubcard Prices discounts each week, with the number of households holding one of its loyalty cards up 6.2% to 22 million and Tesco app users increasing to 16.3 million across the group.

In fact, Clubcard use has risen in all markets, with 82% of UK shoppers now using the loyalty scheme every time they shop. The first “double Clubcard points” event for nearly a decade was also a success, seeing nearly 10 billion points issued during the January and February period.

In addition, Tesco has ushered in increased personalisation, issuing 289 million personalised coupons to 7.6 million customers during the year; ‘Clubcard Unpacked’ shopper insight, which shows customers what they have bought during the previous 12 months, reached over 17 million customers, up from 9 million last year.

Meanwhile, its retail media business is booming; more than 17,000 campaigns were delivered in the past year, backed by Clubcard insights and Dunnhumby expertise.

Tesco chief executive Ken Murphy said: “This strong performance reflects the hard work of colleagues across the whole Tesco Group, and their commitment to serving our customers. Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of our products.

“Inflationary pressures have lessened substantially, however, we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.

“We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices. Customer perception of the quality of our products is growing ahead of the market and we continue to win customers from premium retailers, with sales of Tesco Finest now exceeding £2bn.

“We have strong momentum in our business, and are encouraged by signs of improving consumer sentiment. We’re excited about the opportunities ahead, with the right plans to keep winning with customers, as well as a great team to deliver them.”