Tesco said U.S. loyalty cardholders would earn one point for every dollar spent at Fresh & Easy and would be able to exchange their points for cashback rewards. Tesco's Clubcard scheme is one [image-nocss] of the most successful in retailing, with more than 30 million members in 12 countries, said the report..
If successful, it could be rolled out across the chain by the end of February, The Financial Time reported, quoting Fresh & Easy chief executive Tim Mason.
Neither Tesco nor Fesh & Easy has made an announcement about the loyalty initiative, but according to the blog Fresh & Easy Buzz, plans currently call for Fresh & Easy's loyalty program to be handled in house, where it is being developed with some outside help, rather than being developed, implemented and administrated by Dunnhumby, the U.K. firm now fully owned by Tesco, which developed and administrates Tesco's Clubcard in the U,K.
Dunnhumby's U.S. office, in Cincinnati, can't develop, implement or administrate the loyalty card program for Fresh & Easy because of its long-term partnership agreement and contract with Cincinnati-based Kroger Co., who's loyalty card program was developed by Dunnhumby. Dunnhumby works closely with Kroger in implementing and administrating its loyalty program, along with creating new marketing programs featuring Kroger's loyalty cards.
So the Fresh & Easy loyalty program won't be an exact copy of Tesco's Clubcard.
Click hereto read the full blog entry.MF Global analyst Mike Dennis said earlier this month a loyalty card would be a high-risk strategy for a chain which has relied heavily on money-off coupons to drive sales. "It could confuse shoppers who are meant to believe that Fresh & Easy is a already price competitive and could impact sales in the change over process from coupons to collecting loyalty points," he said.
Espirito Santo analysts, however, said the commitment to a loyalty card suggested Tesco management was more comfortable about the underlying Fresh & Easy business.
Fresh & Easy racked up 186 million pounds ($299 million) of losses in the year ended February, more than analysts' expected and putting a question mark over Tesco's goal, launched in 2007, to conquer the United States with discounter-style neighborhood stores.
New CEO Phil Clarke has pledged a significant reduction in losses this year and that the chain will break even towards the end of the 2012-2013 financial year.
Fresh & Easy, headquartered in El Segundo, Calif., is a unit of U.K.-based Tesco Plc, operates 175 stores in California, Arizona and Nevada. In addition to fresh prepared meals, meats and produce, Fresh & Easy offers everyone's favorite national brand products and household items. The grocer's fresh&easy brand products have no artificial colors or flavors, no added trans fats, no high-fructose corn syrup and only use preservatives when absolutely necessary.
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