Prices, quality, service, and convenience are far more likely to create a loyal customer than store card loyalty schemes, a new report reveals.

Shoppers with loyalty cards are no more likely than those without to stick to the same retailer, according to the study.

In a survey, 78 per cent of card-holders who use them go to the same supermarket always, or most of the time.

Among those without a card or who rarely use it, 79 per cent said they were just as loyal to their chosen chain.

The study also undermines the basis for loyalty cards which allow customers to collect points which they can exchange for rewards such as air miles, day trips, cinema tickets and meal vouchers.

The report, from industry think-tank IGD, found 52 per cent of those polled have a loyalty card from a supermarket which they use regularly.

One in ten shoppers have a card but claim to use it use rarely or not at all. The remaining 38 percent have never had a supermarket loyalty card.

Only eight per cent of those questioned considered it essential for a retailer to operate a loyalty scheme.

The report says: "Typically, factors such as price, quality, service and convenience have a high-perceived value and make a far greater contribution to fostering a loyal shopper than loyalty schemes.

"As such, the importance of loyalty schemes should not be overestimated. They are clearly not a substitute for getting the basics right."

The biggest reason for not having a card was the 23 per cent who said they would forget it.

Wednesday January 07, 2004