Woolworths rejects claims Rewards card backlash could cost ‘hundreds of millions’

Woolworths claims rewards scheme is on track

Woolworths claims its rewards scheme is providing “encouraging results”

Woolworths has rejected claims in Fairfax Media that it will have to redirect hundreds of millions of dollars into cutting prices to counter negative consumer response to changes to its Rewards program.

Fairfax journalist Sue Mitchell claimed that an analysis of one shopper’s behaviour over four months revealed a Rewards point earn rate of 0.3%, far less than the 1.25% rate announced by Woolworths when changes to the scheme were revealed last year.

Woolworths received the biggest backlash from Qantas Frequent Flyer customers who were angered by the retailer’s decision to dump QFF from its Rewards scheme, and replacing it with in-house bonuses.

The furore forced Woolworths into an about-face, offering customers the choice of redeeming their Woolworths Rewards for Qantas points.Qantas frequent Flyer logo

However, a spokesperson for Woolworths said the scheme remained on track and was delivering “encouraging results”.

“Our research clearly shows shoppers want to be rewarded for their loyalty above and beyond getting great low prices,” the spokesperson said.

“It’s very early days and we have always said we will continue to listen to our customers and adapt the program to ensure our customers enjoy Rewards on products they know and love or are likely to want to try.

“For instance, we are currently running a Woolworths Rewards promotion on fresh produce.

“Woolworths Rewards has allowed us to significantly increase our program of tailored offers, sent directly to individual shoppers, and this is delivering very encouraging results.”

After reporting a first half loss of $972m, driven largely by the retail group’s failed investment in the Masters hardware brand, settling in the loyalty program is one of the major priorities for CEO Brad Banducci.

The retailer admitted that issues surrounding its ticketing for rewards needed to be addressed with consumers claiming they are struggling to match the value they were receiving under the previous scheme.

Simon Canning


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