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Tesco sells Clubcard data for 53m

Tesco is making £53million a year selling information on the spending habits of shoppers, including the 16million members of its Clubcard loyalty scheme.

The card is presented to shoppers as a good way of gaining reward points that can be turned into money-saving vouchers.
It is in fact designed to allow the supermarket giant to spy on shopping habits.

Not only does this let Tesco chiefs know which range of products to stock in different areas, but it can also sell the information to a range of retailers and to major manufacturers, including Unilever, Nestle and Heinz. These companies can then decide where they will open new stores or run junk mail advertising campaigns for particular products.

The Clubcard data is analysed by the shopper information company Dunnhumby which is owned by Tesco and made profits of £53million last year.

Dunnhumby pinpoints spending habits down to a postcode area, identifying which groups of residents buy, for example, the most wine, chocolate, fizzy drinks or organic food.

Tesco is also said to save £350million a year because the Clubcard information allows it to only stock products that will sell in vast quantities.

Dunnhumby’s website boasts: ‘We have access to the shopping behaviour of 13million households, with item-level purchase data from Tesco Clubcard. This helps manufacturers to understand the purchase decisions and habits of customers better than anyone else.’

Tesco insists there is nothing ‘Big Brother’ about the collection and sale of the data. It stresses that it does not sell on details of individual consumers, but rather shopping trends at a postcode level.

However, critics said shoppers are in the dark about what is going on. A free web-based company called ALLOW, lets people opt out of marketing databases. Spokesman Justin Basini, said: ‘People think loyalty schemes are all about getting rewards, but they’re about companies harvesting data.

‘Companies make money by tracking your behaviour, analysing the data and selling that insight on to other retailers.
‘When you sign up for a Tesco Clubcard you give them the right to track all your data, purchases, behaviour and combine this with information from outside “to enrich their records”.
‘Consumers are being tracked every minute of every day – when you use your credit card, your loyalty card, when you browse the web, when you use a smartphone app, when you shop online – the list is endless.’

Tesco bought a majority stake in Dunnhumby 10 years ago and bought the business outright last year. The most recent published accounts showed profits of £53.4million. There was a £17.5million dividend which was shared between Tesco and the husband and wife team who set up the firm – Edwina Dunn and Clive Humby.

A Tesco spokesman said: ‘We have never and will never sell our customers’ data. We do use anonymous sales data to improve the shopping trip for customers and we send out £500million of rewards to Clubcard holders every year.
‘Dunnhumby uses this anonymous data to develop insight into how customers shop and it is this insight, not individual customer data, which they market to Tesco’s suppliers.'

Source : Sean Poulter - Mail Online

17 March 2011
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