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Lower prices instead of a loyalty card – Homebase to ditch Nectar as a partner

Now we didn’t see that one coming.

At the end of this year Homebase, one of Nectar’s key partners, is ending their 7 years long partnership.  There is this saying about the seven-year itch…

In January the Australian DIY chain Bunnings bought Homebase for £340 million and will spend another £250 million on rebranding all Homebase stores under the name Bunnings. This will include the introduction of their Australian brands to the UK market and a promise to invest in lower prices rather than continuing Homebase’s patnership with Nectar

The changes have not been mentioned on the Homebase website yet.  However, in order to prepare customers for the changes, notices have been displayed in store reading:

‘After a careful review Homebase will leave the Nectar programme at the end of the year. This means customers will no longer be able to collect or spend points in store after December 31 2016. Our priority now is offering customers everyday low prices across a wider range of home and garden improvement products.’

Will this affect Nectar in general?

I believe so. We’ve already seen changes to Nectar with Sainsbury’s decision last April to halve the number of points awarded which made the card less attractive.

Nectar’s approach of targeted rather than general offers and a generally more complicated and less rewarding system than, for example, Tesco’s Clubcard are the reason for many customers not taking Nectar points seriously (although we do our best here at Shopper Points!).

There seems to be an overall change in supermarket loyalty cards on the horizon. Tesco has already slashed their Clubcard Boost events and is currently reviewing Clubcard, analysing how to make the card and the supermarket more appealing.

Customers don’t want to invest time to understand and figure out loyalty schemes. Savings need to be obvious and loyalty cards have to be worth the points.  The Marks & Spencer Sparks scheme is a prime example of how to do it badly as we wrote a couple of months ago.

For Nectar, this is another blow and it desperately needs a major new partner if it is to continue to be taken seriously.

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  1. Virgin Trains East Coast really backed a winner here 😀

  2. The m&s example is a strange one, if stores are trying to roll back their loyalty offerings then why has m&s just recently launched a brand new one, I appreciate lead in time will have been significant, but they must believe there is value.

    • And what about Morrisons launching its own scheme relatively recently too?

      • Morrisons card has now been totally overhauled twice in under three years which suggests they can’t get it right.

        They have renamed it in the last month and are sending out new cards.

        I wouldn’t be surprised if BP is the next to go from nectar. They were sending out questionnaires recently asking what customers thought of the loyalty scheme and what would appeal more.

      • Frenske says

        Oh God Morrisons More is pretty terrible. It gives you about 0.5% return on normal shopping. You’ll need to spend £1000 to get a fiver back. So More is only suitable for regular shoppers and especially those who take petrol which gives about a decent 1% back.

    • M&S has made a complete mess of it though, as our article shows. Do you know anyone who is even vaguely interested in the M&S scheme?

      I’m not even allowed to join it! We spend about £40 on M&S food each week but pay with gift cards we buy at a discount. Purchases made with M&S gift cards are not eligible to earn Sparks points.

      Loyalty schemes are very hard to get right. They cost a huge amount in overheads, before you start factoring the value of the rewards, so you really need to get it right.

      Even Waitrose is having issues I think. I am ambivalent about myWaitrose if I leave me card behind because the benefits are modest. However, I recently bought something for £15 which was 25% off with a myWaitrose card – which was at home. I overpaid by £3.75 and was then very annoyed – not at myself, but with Waitrose, especially as they refuse to add myWaitrose cards to their app.

      If I were Sainsburys I would be considering buying Nectar now. They would then get full control of the data which is where the value sits. With Sainsburys now owning Argos I imagine 75% of points generated after Homebase goes will be via them.

      • Genghis says

        FWIW, M&S do not seem to remove Sparks points if you refund items. I quite like getting the odd 20% off vouchers.

      • Tilly71 says

        Strange, we used M&S gift cards today to pay for food and all sparks points showing on receipt?

        • Since I bought about £1700 of M&S vouchers in Dec I’ve been using them for food and clothes every week and I get points all the time – up over 10k – I only buy a few of the same products rather than a big shop and so far have been targeted a few times for 20% off those regular items – not much but every little helps as they say!

        • Genghis says

          I think you’re right Tilly71. I’ve used M&S gift cards from Tesco for a while now and have kept accumulating Sparks (over 20k now – not that they really mean anything).

      • Just ask the cashier to key in your myWaitrose card number…

      • TGLoyalty says

        No Issue using sparks with gift cards

        I find the M&S/waitrose schemes pretty good much rather have real money off deals than points which in most cases, bar clubcard, don’t have much use but money off your shopping anyway

        MyWaitrose is infuriating that they don’t have the card on an app as I had the same issue as you.

      • I think Waitrose will be adding the card to the app sometime soon… they’ve been testing an app that allows you to scan your shopping as you walk around the supermarket, then scan the app at the till and pay. It’s the same concept as Scan & Shop except you’ll be able to do it in every store and Waitrose save saves money by not having the huge capital outlay on the handheld scanners for the branches.

        Waitrose have recently launched ‘Waitrose 1’ and they’re offering 25% off all products in the range until 14 June when you scan your myWaitrose card.

        • It was a Waitrose 1 ‘25% off’ product which got me annoyed I had left my myWaitrose card at home!

  3. Never mind the Nectar points (honestly, did anyone ever shop in Homebase because of those?) that name change is dreadful!

    Why go through an expensive re-branding exercise to ditch a 30+ year old brand name with instant recognition in favour of one that no-one in the UK has heard of, and sounds like it’s selling baking supplies?

    • Tilly71 says

      I would say one of the reasons i used to shop in Homebase was Nectar points. The fact that I would regularly get sent 500pts on £30 spend, triple nectar points and collect 750 points on spend in my nectar account coupons used all in one purchase meant I would walk out of the store 1500 – 2000 points for buying diy materials I needed. The main driver was buying homebase gc in Tesco for bonus points meant a win,win situation for me.

      • Where would you have shopped if there were no nectar offers?

        • Tilly71 says

          B&Q so I could use GC bought at Tesco. The only problem with B&Q was we like a certain brand of paint and Homebase sell it and not the other.

  4. My local Homebase closed months ago and became The Range so not missing out there.

    Virgin East Coast is where my points will be hopefully spent soon. Got enough now for a first class trip to London (7000 = £35 I think) so I’m happy with that (unless of course I spend it in store and get Virgin Miles for the £35 cash sale)…..decisions decisions.

    I’m spending more at Sainsbury at present compared to Tesco so obviously, in my case, Nectar is drawing me in. I would rather get some “reward” at the end of a shop than some fake “you saved £xxx on your shop” as with Tesco etc.

    • Genghis says

      Clubcard points?

    • You actually earn points/miles on your VTEC purchase even if you use an eVoucher. This means that if you redeemed your Nectar points for £35 voucher and bought a ticket with it you could still earn Virgin Miles.

      Please note that you can only redeem on Virgin Trains East Coast services so if you don’t live on the East Coast route then it’s best to just redeem in a Sainsbury’s. After all saving £35 in Sainsbury’s is the same as saving £35 on train fares and it’s much less hassle to redeem in Sainsbury’s.

      Of course Tesco is a lot more rewarding. A Clubcard point is worth at base value twice that of a Nectar point and there’s a lot more opportunities to get extra value.

  5. Sainsburys are throwing out nectar points like there is no tomorrow. I have 490 bonus nectar point vouchers in my wallet on things that I buy regularly and seem to get a 3x or 5x points voucher nearly every week! The mycoupons page also has triple points for me currently, so that’s 8x points I could get on a shop of £20 or more.

    If I spend £100, I’d get £6.45 back on that lot!

  6. The value of Nectar (at least at Sainsbury’s) does not lie in the standard point, but in the additional coupons you get. Two times over the last couple of months I had a ‘Save GBP 4.50 when you spend GBP 30’ print voucher AND a ‘600 Nectar points when you spend GBP 30’ mycoupons voucher. Since these can be combined this means you save 22% on a GBP 34.50 shopping (valuing Nectar points at 0.5 pence). This is probably the optimal you can get, but since the reduction from 1 to 2 base points, I’ve probably saved an average 5% on my shopping at Sainsbury’s with those coupons (and this doesn’t include coupons for individual products which I only use occasionally, as they are quite tedious to use).

  7. Anyone else get that email survay for 100 points, was asking how would your shopping habbets change if B&Q gave nectar points……

  8. Tilly71 says

    My next project would be from b&Q purely because tesco still sell gc on the bonus points. Nectar points would just be an added bonus.

  9. Stephen C says

    I will say this for Nectar, twice in the last month I’ve got 250 extra points for buying fuel at a BP garage, no minimum spend. £1.25 back on £5 of petrol is a pretty decent deal when I’ve been driving past the garage anyway. Hoping I get it in December when I shop small on my Amex in the attached Spar.

  10. The Morrisons More card (ex match & more) is far better than appears at first. The petrol discount is fine – 10 points a litre so 600 points or 60p off a fill -up, ie c.1%. The in-store % for normal shopping is bad – but the till is constantly chucking out vouchers – on Monday I redeemed both 3000 & 3500 points wys £30 (2x shops so £60), ie over 10% discount. If I had not needed beer, I could have got an Amazon voucher and a further discount on my petrol.

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