Tesco drives share with Clubcard in international markets

Tesco is leveraging its Clubcard loyalty card in international markets in order to grow share.

Reporting financial results for the year ending 27 February 2010, Tesco said Clubcard was now operating in seven markets worldwide and it revealed there were more Clubcard holders internationally than in the UK.

The scheme, which was launched in the UK in 1995 by the data mining experts, Dunnhumby, has been introduced and expanded in Asian and central European markets in the last 12 months.

Tesco launched Clubcard in Thailand in August 2009 and reports 4m customers have signed up so far. Despite political unrest in the country, Tesco Lotus in Thailand recorded double digit profit growth last year. The opening of six hypermarkets, 11 supermarkets and 75 Express convenience stores drove sales and kept Tesco at number one, it says.

Clubcard was also launched in Poland in August 2009. According to Tesco, it has been been well received with 1.8m customers joining to date. Tesco enjoyed strong sales growth from its Polish stores last year with strong clothing sales in particular.

Clubcard was introduced in Slovakia in September 2009 in order to drive customer loyalty in a challenging market.

Back in Asia, Tesco reports it is continuing to invest in Clubcard in Malaysia, where sales are up by 9%. It has more than 1m customers signed up and the Dunnhumby team is reported to be working with Tesco locally to provide insight on pricing, range and promotions. Tesco increased its footprint by 11% in Malaysia last year and plans 27% more space in 2010/11.

Korea, Tesco’s largest international market with sales of £4.5bn, enjoyed another strong year with like-for-like sales up 3% and profits up 50%. Tesco opened 63 new stores in Korea last year. It opened its first franchise store in February 2010 and has more in the pipeline.

New space is targeted in China too with 23 hypermarkets planned, including nine malls.

In Japan, Tesco’s toughest Asian market, a new convenience format with a focus on fresh food, an in-store bakery, extensive wine range and 400 new own label products, is reported to be winning good feedback.

In the Czech Republic, meanwhile, Tesco’s Express and 10,000sq ft stores are outperforming larger outlets.

In the US, Tesco is stepping up its expansion of the Fresh & Easy chain with plans to open new stores at a rate of one a week this year and focusing on areas where the local economy has been less severely hit. At the year end, Tesco had 145 Fresh & Easy stores in the US.

Back in the UK, Tesco reports its Double Points promotion has encouraged more customers to sign up to Clubcard and 18% more households are redeeming Clubcard vouchers than a year ago.

The retailer said it was also making Clubcard more valuable via improved partner deals and more accessible with innovations such as a contactless Clubcard app for the iPhone.

Tesco Lotus Thailand: gaining Clubcard holders