Sainsbury's to cut prices with self-scanner service

LONDON Reuters -- Sainsbury's Retail Group will offer lower prices to customers using its digital loyalty system and self-scanner service, deepening ties with shoppers and cutting costs in the latest wave of innovation that hits the industry.

Dominated by Tesco and challenged by the German discount groups Aldi and Lidl, Britain's supermaket sector has been marked for decades by fierce competition and low margins.

The move to offer tailored digital discounts with Nectar was the most important for UK grocers, but it follows similar targeted initiatives by some U.S. and French food retailers.

It goes beyond the traditional loyalty model of customer spend translating into points that can be redeemed on products and is designed to encourage shoppers to use its SmartShop scanner service, either with handsets or on their smartphones, which ultimately will reduce the number of manned check-outs required in stores.

From next Wednesday, Sainsbury's said that all customers selected in stores will be able to access lower prices on a selection of up to 10 different branded and Sainsbury's own-brand products selecting for them on a weekly basis.

In comparison Tesco's Clubcard Prices Scheme offers lower rates to all Clubcard members on certain products, but the offers are not personalised. Co-Op is a smaller retailer that offers discounts on fewer products based on spending habits.

Mark Given, Chief Marketing Officer of Sainsbury's, told Reuters the price reductions - named My Nectar Prices - would be a minimum of 10 per product.

He said more value conscious customers would likely get regular discounts on vegetables, fruit, meat, fish and poultry - the key fresh food battleground between Aldi and Lidl that has forced the whole sector to cut prices.

More loyal shoppers at Sainsbury's will get rewarded on things they usually buy and also offers on other products their data suggests they would be interested in.

Advancements in cloud computing and automation mean you can now process genuinely real-time offers that are personalised with more real-time data, Given said, adding his team had been working on individualisation algorithms and engines for up to five years.

The new My Nectar Prices offers will be additional to other loyalty points offers already available on the app.

Sainsbury's now has eight million customers enrolled in Nectar digital app, and CEO Simon Roberts is targeting 10 million customers by the end of next year.

The new service should also encourage a greater use of the self-scanning SmartShop service, which has taken off during the COVID 19 pandemic as shoppers seek less human contact.

Sales were up 173% in the 2020-21 financial year and in supermarkets with handsets, 30% of all sales were over SmartShop, more than double the 2019-20 level of 14%.

According to Sainsbury's, as I get feedback from customers, will test My Nectar prices on the online grocery channel before eventually rolling it out to retail stores.

Shares in Roberts Food First have risen 28% so far this year, buoyed by bid speculation following the back of Morrisons takeover saga and signs that shares in Sainsbury's stock have risen 28% so far this year.