Clubcard under fire for inflating sales

clubcard couponsTesco’s strategy of putting Clubcard at the heart of its operation has been taken too literally for some in the City, after claims that it is using spending on vouchers to beef up its sales figures.
According a report in The Sunday Times, investment bank Citigroup says the retail giant is using Clubcard to mask the malaise affecting its UK business, branding its financial performance “less meaningful for investors”.
The report goes on to claim that Tesco has added in some £2.5bn worth of sales through vouchers since 2009, without factoring in the cost of issuing them.
It quotes one investor as saying: “It is symbolic of what Tesco is all about at the moment, which is trying to make itself look better than it is because it is in a weak place. Tesco hasn’t done a good job at getting promotions right.”
At the moment, if customers spend £100, they earn an extra £2 in Clubcard vouchers. Tesco then reports the sale as £102, rather than £100 under standard accounting.
Tesco insists it is doing nothing wrong, replying that it “publishes a range of like-for-like sales numbers” each time in reveals its results.
In recent weeks, the retail giant has shown just how far its data strategy stretches within the business. Last month it revealed it had made savings of nearly £120m a year using data to better manage both stock control and energy bills.

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