Sainsbury buys Nectar loyalty program for £60m

What you need to know 

Sainsbury’s acquisition of the Nectar loyalty program and its related assets for £60m is a strategic move by the grocer, primarily to gain insights into consumer behaviour across a number of industries, defends against entrance of Amazon to the sector.

Jonathan Buxton, partner and head of consumer and retail at Cavendish Corporate Finance, said: “Sainsbury’s acquisition of the Nectar loyalty program and its related assets for £60m is a strategic move by the grocer, primarily to gain insights into consumer behaviour across a number of industries, defends against entrance of Amazon to the sector.”

In today’s hyper-competitive grocery landscape, consumer data is king - for grocers, it helps them to market more effectively to consumers, optimise their ranges and maximise footfall. With the Nectar loyalty program under its roof, Sainsbury’s is putting consumers right at the front of its business, in contrast to the Tesco-Booker deal, where Tesco seems to be increasingly becoming a logistics operation. The deal will give Sainsbury’s unparalleled access to consumer habits within both Sainsbury’s stores and other operators,  such as Vue Cinema, Ted Baker, and  eBay, allowing it to refine product offerings, pricing and marketing. With Amazon gaining traction in grocery following the Whole Foods transaction and given the superior consumer data available to Amazon as an online specialist, we expect to see further acquisitions and collaborations as the grocers seek to gain new insights into consumer behaviour.”

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