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July 19, 2011

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Home » Business » Consumer

Tesco looks to loyalty card to give US boost

TESCO , the world's No.3 retailer, will test a version of its successful Clubcard loyalty card in the United States as it battles to stem losses at its Fresh & Easy chain.

Yesterday, the British supermarket group said it would trial the "Friends of Fresh & Easy" card in seven stores in central California, this autumn.

If successful, it could be rolled out across the chain by the end of February 2012, the Financial Times newspaper said, quoting Fresh & Easy chief executive Tim Mason.

Fresh & Easy racked up 186 million pounds (US$299 million) of losses in the year ended February, more than analysts' expected and placing a question mark over Tesco's goal, launched in 2007, to conquer the US with discounter-style neighborhood stores.

New Tesco chief executive Phil Clarke has pledged a significant reduction in losses and that the chain will break even towards the end of the 2012-3 financial year.

MF Global analyst Mike Dennis said earlier this month a loyalty card was a high-risk strategy for a chain which has relied heavily on money-off coupons to drive sales.

But Espirito Santo analysts, said the card plan suggested Tesco management were comfortable about the underlying Fresh & Easy business.




 

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