Grocery loyalty : Tesco Clubcard and its impact on loyalty

Abstract: Purpose – The aim of the research is to identify the impact of the Tesco Clubcard on customer loyalty. The secondary aim is to contrast customer perceptions of the Clubcard, staff and “feeling valued” to identify which factor has the greater impact on customer loyalty to store. Design/methodology/approach – Quantitative analysis was used based on 60 questionnaires conducted with randomly selected customers in Tesco Metro Dundee in 2005. Tesco were not involved in the research other than to provide approval at a store level for the research to take place outside their premises. Findings – A positive moderate relationship was found r=0.388, p=0.01 between the owning of a Clubcard and loyalty to store. It was also found that there was a positive moderate relationship between the Clubcard returns and customer loyalty, with r=0.334, p=0.01. The research, however, found no relationship between loyalty and customers feeling more valued by Tesco, nor did the research reveal a significant relationship between Tesco staff and customer loyalty. Research limitations/implications – The research is restricted in so far as it only considers Tesco Clubcard in the grocery retail sector and as it is an exploratory study the research is limited in so far as the number of participants is only 60. A further limitation surrounds the issue of generalisability as only one Tesco retail outlet in Dundee was used. Further research needs to include other Tesco formats and contrast with grocery retailers who do not use loyalty cards. Practical implications – It is suggested that Tesco consumers are influenced by having a loyalty card in so far as it contributes to making them loyal. However, other factors need to compliment such a card, with consumers seeing the Tesco “provision” as inter-related. Originality/value – The paper is useful to both practitioners and academics in the fields of relationship marketing and loyalty. The research provides some initial insight into consumer perspectives in the value of loyalty cards.