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The Financial Times reports this morning that Tesco, which has run a highly effective Clubcard loyalty marketing program in the UK, plans to expand usage of the program to its US Fresh & Easy Neighborhood Market division.

The story, by the always reliable Jonathan Birchall, notes that “a loyalty programme would mark a shift in Tesco’s strategy in the US. The company originally envisaged Fresh & Easy, which it launched in 2006, as a ‘hard discount’ store focused on delivering the lowest possible price to shoppers.

“The move comes as Tesco steps up its marketing efforts in the US as it gains scale. It launched its first regional radio and newspaper advertising campaign in September.”

The story points out that whatever Fresh & Easy does in terms of loyalty marketing, it will have to do without the considerable expertise and experience of Dunnhumby USA, the date analysis and marketing company that Tesco owns with Kroger - a retailer with which Fresh & Easy competes. Kroger has US supermarket exclusivity with Dunnhumby, and so Fresh & Easy will have to find another route to creating a program here.
KC's View:
It has always been felt here that Tesco was operating with one hand tied behind its back by not using some sort of loyalty scheme in its Fresh & Easy operations - and it was the hand that was capable of delivering the most effective punch. Dunnhumby’s expertise may not be available, but that doesn’t mean Tesco will be starting from scratch. Far from it.

Fresh & Easy has had more than its share of problems to deal with, and there remains considerable skepticism in some quarters about its ability to survive long-term. The use of a loyalty marketing scheme, however, could be a game-changer.