A MAJOR marketing battle in the supermarket sector is set to get under way next week when Dunnes Stores introduces a loyalty card offering cash discounts to regular shoppers.
The move is partly designed to combat an expected drive by Tesco to increase its share of the Irish market following its recent purchase of the Quinnsworth/Crazy Prices chain.
The Dunnes Stores "Value Club" scheme is being unveiled on Monday and will be backed by a major advertising campaign. The Irish Times understands that the scheme will allow Dunnes customers to build up points which can then be exchanged for vouchers. These will entitle the shopper to cash discounts.
Superquinn already operates a loyalty card scheme, its "Superclub" card, which offers shoppers a choice of gifts or cash discounts for points built up from purchases. However, until the Dunnes move no other major supermarket group had followed Superquinn's lead in this area.
Dunnes Stores is understood to have been considering the move for some time, although a company spokesman yesterday would make no comment.
Last year Dunnes Stores poached a senior Quinnworth executive, Mr Dick Reeves, who is spearheading its marketing plans. It is also spending heavily on technology in its stores which will give it much wider options in using its loyalty card schemes to target consumer groups.
Initially, the scheme is expected to offer customers a discount of about 1 per cent on what they spend. Thus, if a shopper spends £200, he or she will qualify for a £2 discount through vouchers.
Tesco's recent acquisition of Quinnsworth and Crazy Prices is likely to have spurred Dunnes into action. Tesco operates a highly-successful loyalty card scheme in the UK, which has 10 million members, and is expected to introduce a similar scheme in Ireland.
Announcing its acquisition of the Quinnsworth chain earlier this year, Tesco made no secret of its" wish to build market share. The Quinnsworth chain now has some 25 per cent of the £4 billion grocery market, probably slightly ahead of Dunnes Stores.
