Nakumatt, Uchumi unclaimed client loyalty points hit Sh630m

Corporate News

 

Uchumi Supermarkets CEO Jonathan Ciano and Tanzania based Quality Group CEO Yusuf Manji. The acquisition is part of the supermarket’s planned expansion in Tanzania over the next eight months. PHOTO | FILE | NATION MEDIA GROUP

 

By DAVID HERBLING

In Summary

• Nakumatt operations director, Thiagarajan Ramamurthy, said the supermarket ranked Kenya’s largest by sales has about 300 million points worth Sh600 million that are yet to be redeemed by customers.

Nakumatt and Uchumi’s unclaimed customer loyalty points have accumulated to nearly Sh630 million, a pointer to the cost that supermarket chains are incurring to woo customers.

The loyalty points, which are “rewarded” to customers on the basis of their purchase value, are later “redeemed” mostly as payment for shopping or other gifts in kind.

Uchumi’s unclaimed customer loyalty points were worth Sh26.1 million in the period to June 2014 compared to Sh12.3 million a year earlier, according to the retailer’s latest annual report.

Nakumatt operations director, Thiagarajan Ramamurthy, said the supermarket ranked Kenya’s largest by sales has about 300 million points worth Sh600 million that are yet to be redeemed by customers.

The Business Daily could not get the value of unclaimed customer loyalty points held by Tuskys and third-placed retailer Naivas by the time of going to Press.

Naivas in September last year unveiled a Visa-branded reward card that also works as a prepaid card.

Tuskys has rebranded its retail loyalty card to Tuskys Reward Card, which was formerly known as MagicPay.

The accumulated customer loyalty points have seen the retailers roll out marketing campaigns to encourage customers to use their points to pay for shopping.

For example, Nakumatt in February paid out Sh30 million in school fees under a programme where Nakumatt converts smart points into cash.

The Nakumatt “back to school loyalty points” redemption scheme’ saw the supermarket award smart card holders Sh2 per point.

Uchumi runs a loyalty programme known as U Club where shoppers earn one point for every Sh100 spent at the retailer.

The points are held in a loyalty card dubbed U Club Card and customers need to accumulate at least 100 points to redeem the points.

“The points are only to be redeemed for goods and services at Uchumi and shall not be exchanged for money,” Uchumi says on its website.

Nakumatt also awards shoppers one point for every Sh100 spent at the supermarket. The loyalty scheme is rolled out through the Nakumatt Global MasterCard, which is also a pre-paid card and Nakumatt smart cards.

The retailer said it has about 600,000 Nakumatt Global MasterCard holders and about 600,000 Nakumatt smart card holders.