Sobeys starts rewards program

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This article was published 18/09/2008 (6313 days ago), so information in it may no longer be current.

The local grocery stores war is heating up as Sobeys Inc. tries to beat the competition at their own game by launching its own customer rewards program.

Starting this week, Sobeys customers can sign up for a new Club Sobeys rewards card or a no-fee Club Sobeys Mastercard credit card.

Sobeys Inc. president and CEO Bill McEwan said the new program is one more way for Sobeys to “connect” with its customers.

It’s also a way to keep pace with the competition, according to Robert Warren, a marketing professor with the University of Manitoba’s I.H. Asper School of Business.

Warren said research has shown that while customer rewards programs may not lure a lot of new customers to a store, they’re an effective tool for retaining existing ones.

“It’s one of those things where if you don’t have it, a customer might say, ‘Gee, I don’t think I want to deal with you anymore,'” Warren said.

And with retail heavyweight Wal-Mart Canada muscling into the grocery business in a bigger way, traditional players like Sobeys, Canada Safeway, and Real Canadian Superstore need to do everything they can to protect their customer base, he said.

While Safeway and Superstore may have beaten Sobeys to the punch with their rewards programs, McEwan said the Sobeys program is superior because it offers consumers more options for how they can redeem their rewards points.

Under the program, Club Sobeys cardholders receive one point for every dollar they spend, and the points can be redeemed for cash savings at the check-out, for food-related items from the retailer’s new online rewards catalogue, or for Aeroplan Miles.

They can also double their points if they pay with the new Sobeys credit card.

Sobeys has partnered with Citibank Canada to offer the credit card. Citi Cards Canada Inc., an affiliate of Citibank Canada, will perform all account servicing and related activities on the cards.

The Sobeys’ launch comes just days after Wal-Mart Canada applied for a banking licence that would allow it to issue its own credit card and a host of financial products such as savings accounts and mortgages.

McEwan said Sobeys waited until now to launch its rewards program because it’s been focused on expanding and upgrading its network of stores in Western Canada. Those upgrades included installing new information technology that will enable the company to collect information about customer buying patterns and better tailor its rewards program to suit its customers.

Warren said that information will also be useful in determining what products the retailer should be stocking.

The rewards program will be offered in all 194 Sobeys stores in Ontario and Western Canada, including 16 in Manitoba.

murray.mcneill@freepress.mb.ca