11Ants – Tesco Loyalty Card

A Game-Changer in Loyalty Schemes - Celebrating 30 Years of Tesco Clubcard 

2025 marks the 30th anniversary of Tesco’s Clubcard, a loyalty program that has not only transformed the way British consumers shop but also set a global benchmark for retail loyalty. From its inception in 1995 to its current status as a household name in the UK, the Clubcard has been a cornerstone of Tesco's success, leveraging customer data to create value for both shoppers and the business.

Where it all started 

The Tesco Clubcard was launched in 1995 after extensive research and development led by Tesco’s marketing team. The program was revolutionary for its time, moving beyond traditional loyalty schemes like stamps or punch cards. Instead, it introduced a data-driven approach that rewarded customers based on their shopping habits. Within just one month of its launch, Tesco overtook Sainsbury’s as the UK’s leading supermarket - a testament to the program's immediate impact.

Membership Growth and Reach

Over the past three decades, the Clubcard has grown exponentially. Today, it boasts 23 million members across 28.3 million UK households, achieving an impressive 82% sales penetration in the UK market. This growth has been fuelled by continuous innovation, including digitalisation and personalised offers through AI-powered tools like Clubcard Challenges.

What Does the Clubcard Offer?

The Tesco Clubcard provides members with points for every pound spent (£1 = 1 point). The points can be redeemed for discounts on groceries, clothing, electronics etc or converted into vouchers for use with Tesco’s Reward Partners, effectively doubling their value. 

Tesco claims that its Clubcard members save up to £385 annually on groceries. Additionally, exclusive discounts and personalized offers make the program highly attractive to shoppers.

And Beyond the Discounts

Tesco Clubcard is more than just a discount tool; it creates a sense of community among its users. By leveraging customer data, Tesco personalises offers and rewards, enhancing customer loyalty and satisfaction. This data-driven approach has also helped Tesco refine its operations and boost profitability—pre-tax profits rose nearly 20% to £1.39 billion in 2024.

How Does It Compare?

Tesco’s Clubcard stands out among UK supermarket loyalty schemes:

Supermarket	Loyalty Scheme	Points Value (Groceries)	Unique Features
Tesco	Clubcard	£1 per 100 points	Personalised offers, Reward Partners doubling points’ value
Sainsbury’s	Nectar	£0.50 per 100 points	Bonus points for specific purchases (eg, fruits and vegetables)
Waitrose	MyWaitrose	No points system	Free coffee/tea and discounts on selected items
Marks & Spencer	Sparks	No direct monetary rewards	Charitable donations for purchases; personalised discounts

Tesco’s ability to double the value of points through Reward Partners gives it a clear edge over competitors like Sainsbury’s Nectar scheme. While Waitrose and Marks & Spencer focus on other perks like free items or charitable contributions, they lack the robust monetary rewards offered by Tesco. 

Continuing to Innovate…

In 2020, Tesco implemented several transformative changes to its Clubcard loyalty program, which significantly contributed to its growth and revitalization. These changes were designed to enhance customer value, increase engagement and leverage data more effectively. Key adjustments included: 

• Clubcard Prices, exclusive discounts for loyalty members. The discounts are applied directly at the till, making the value of the Clubcard immediately visible to customers. This move addressed a critical customer need for tangible savings and helped differentiate Tesco from competitors. The initiative increased Clubcard penetration in stores, with usage rising from 57% to 70% across all stores and from 67% to 80% in larger stores.

• Enhanced Digital Integration - Tesco heavily invested in digitalizing the Clubcard experience, including the launch of a revamped app that combined grocery shopping and loyalty features. By 2021, over 6.6 million customers were regularly using the app, up from 2.5 million in August 2020. The digital shift allowed for quicker voucher generation, seamless access to discounts and improved customer convenience.

• More Focus on Personalization - Tesco began leveraging its vast customer data more effectively to deliver personalized offers. In just one half-year period, the company sent over 4.5 million tailored promotions through the Clubcard platform. These personalized offers helped deepen customer engagement and loyalty by aligning rewards with individual shopping habits.

• Expansion of Reward Partners - the Clubcard program continued to expand its partnerships with external brands, offering customers more ways to redeem points for experiences like dining out or travel. The added versatility made the scheme more attractive and valuable to members.

• Simplification and Accessibility - Tesco worked on removing barriers that hindered customer participation in the program, such as outdated paper systems and cumbersome password requirements. The company also made the scheme more accessible by ensuring that benefits like Clubcard Prices were easy for all customers to understand and use.

• Data-Driven Strategy - the digitalization of the Clubcard allowed Tesco to collect richer data on customer behaviour. This data was not only used for personalization but also integrated into Tesco’s broader supplier strategy, enabling brands to market products more effectively through targeted promotions based on Clubcard insights

And the results of the Innovation…

• Membership surged from around 14 million in 2020 to over 23 million by 2024, representing penetration in over 80% of UK households.

• The program became a key driver of Tesco’s financial success, contributing to a nearly 20% increase in pre-tax profits by 2024.

These strategic changes not only revitalized the Clubcard but also solidified Tesco’s position as a leader in loyalty programs by delivering clear value and fostering deeper connections with its customers.

And There’s More - Adding a Clubcard Subscription 

In 2019, Tesco launched its Clubcard Plus - a premium subscription service that enhanced the standard Clubcard experience with additional benefits for a monthly fee of £7.99.  Clubcard Plus subscribers receive:

• 10% off two in-store shops up to £200 each month

• 10% off selected Tesco brands like F&F, Fred & Flo, Go Cook, Fox & Ivy and Tesco Pet

• double Clubcard points and double data on Tesco Mobile plans

• fee-free foreign exchange on a Tesco Bank credit card

Checking Out…

Tesco’s Clubcard dominates the loyalty market in the UK with higher redemption values, broader partnerships and deeper personalization. Sainsbury’s Nectar card competes closely with aggressive digital pricing while Waitrose and Morrisons focus on simplicity but lack comparable rewards. 

For loyalty managers, Tesco’s model - blending data, tiered benefits and supplier collaboration and innovation remains the industry benchmark.

As Tesco celebrates 30 years of its pioneering loyalty program, it continues to lead the way in leveraging customer data to drive engagement and retention. The Clubcard is not just a loyalty scheme; it’s a blueprint for how retailers can use technology and insights to build lasting relationships with their customers.

For loyalty managers and retail executives looking to replicate this success, Tesco’s journey underscores the importance of innovation, personalisation and understanding customer behaviour through data analytics - a philosophy that aligns perfectly with solutions like those offered by 11Ants.