New supermarket “challenges” that reward shoppers with extra loyalty points for increased spending could lead to overspending, consumer groups have warned. Four of the UK’s biggest supermarkets—Tesco, Sainsbury’s, Asda, and Morrisons—are now offering loyalty scheme members bonus points for meeting spending targets. These supermarkets claim their schemes provide better value and more personalized savings for customers.

However, consumer group Which? and debt charity StepChange caution that these shopping challenges might encourage people to spend more than they can afford. These challenges represent the latest evolution in increasingly sophisticated supermarket loyalty card schemes. This comes at a time when food prices, which rose at an annual rate of nearly 20% last year—the highest since the 1970s—are only now returning to more typical rates.

“Competition between supermarkets is fierce at the moment, with all of them highlighting the number of price drops,” said Ele Clark, retail editor at Which?. “But overall, food is still much more expensive than it was a couple of years ago.”

Ged Futter, a former buyer for Asda who now advises suppliers on negotiating with retailers, said personalized prices and challenges are strategies for supermarkets to compete for customers. “They’ll analyze the products you buy throughout the month and then offer you deals to ensure you keep buying those products from them,” he explained. The challenges vary by supermarket and may involve shopping more frequently or meeting spending targets on specific products within a set timeframe.

Jo Rourke, a single mother of three from Manchester, warned shoppers to “act with caution” regarding loyalty card challenges. “The terminology of ‘challenges’ can make it feel like a game, which can be dangerous for those easily drawn in,” she told the BBC. Ms. Rourke, who shares money-saving tips on her @thismumcooks social media accounts, expressed skepticism about these challenges prompting her to shop more at one store. “It doesn’t pay to be a loyal customer. It’s better to shop around at all the supermarkets in your area,” she said. According to research firm Kantar, the average person has loyalty cards for three supermarkets.

Tips to Save Money on Food Shopping:

  • Learn prices: Familiarize yourself with the cost of regularly purchased items to identify genuine offers.
  • Compare price per 100g: Check the price per unit across similar items, as loyalty prices might not always be the cheapest.
  • Set a budget: Stick to a budget and avoid being tempted by vouchers or challenges that require higher spending.
  • Stock up: Use money-off vouchers to bulk-buy non-perishable staples like pasta, rice, and canned food.
  • Use tech: Utilize supermarket comparison apps to track your favorite items and receive price alerts.

Ms. Clarke at Which? emphasized the importance of moderation in supermarket challenges, especially for families struggling to make ends meet. She highlighted that loyalty card prices at Sainsbury’s and Tesco might not be as beneficial as they appear. The Competition and Markets Authority (CMA) announced a review of loyalty pricing by supermarkets in January 2024, investigating whether these prices are genuine promotions or potentially misleading, and whether they disadvantage any groups or influence shopping habits and competition. An update on the CMA’s findings is expected in July.

Simon Trevethick, head of communications at StepChange, noted that while loyalty schemes can offer helpful discounts, they also risk encouraging overspending. He urged anyone facing financial difficulties to seek help from the charity.

The BBC reached out to Tesco, Sainsbury’s, Asda, and Morrisons for their response to concerns about overspending due to loyalty challenges. A Tesco spokesperson said their challenges aim to reward customers for buying their regular products. Sainsbury’s stated that bonus points are awarded based on the number of shops, with a minimum qualifying spend of £1 per shop. Asda and Morrisons did not respond.