Select Committee on Home Affairs Written Evidence


Supplementary memorandum submitted by the Loyalty Management Group

  We refer to the Evidence heard in public by the above Committee on 7 June 2007 and, in particular, the Chairman's comment in Q161 (page 45) of the uncorrected transcript of oral evidence.

  The Chairman has requested further information on how loyalty card data is used and whether the customer has any control over it in the context of the preceding questions relating to use for supermarkets' strategic planning purposes.

  As explained in our oral evidence, Nectar does not use data for strategic planning purposes for Sainsbury's (as the company issuing Nectar points in the supermarket sector) and, under Nectar's Policy on Privacy and Data Protection, information provided to Nectar is to be used for marketing purposes. Sainsbury's, of course, also obtains information itself when consumers buy products in its shops and, as we also explained in our oral evidence, can access data held by Nectar on Sainsbury's customers.

  As to whether consumers can control the use of their data for such purposes, participation by consumers in Nectar is entirely voluntary and the purposes for which their data will be used is clearly disclosed to consumers before they join the programme as part of the registration process. Consumers are able to opt out of the purposes for which Nectar holds data at any time, whether in writing, over the phone or by using the My Account facility on the Nectar website. However, as these purposes do not include strategic planning purposes, such an opt out is irrelevant and so does not appear.

  As noted above, Sainsbury's does have access to Nectar customer records to the extent that they are Sainsbury's customers but only Sainsbury's customers. We would expect that Sainsbury's, like many other businesses, would use all the resources and information at its disposal in making important decisions, including quite possibly the location of its shops. We believe that consumers would be aware that Sainsbury's might use the information it has available on its customers' shopping behaviour, as well as other information available to it, for any legitimate purpose. Such other information in this context might also include, amongst other sources, electoral roll data, generally available lifestyle data (e.g. Acorn), market research data and demographic studies.

  The specific point made by the Chairman at the hearing on 7 June was whether shopping patterns could be used to have a district shopping centre put out of business by a new superstore. With respect, we consider that such matters are of limited relevance to the issue of "A Surveillance Society?" and are already governed by other legislation (e.g. planning legislation, competition law) and other enquiries, such as the current market investigation into the supply of groceries by supermarkets being undertaken by the Competition Commission after referral by the Office of Fair Trading in May 2006.

June 2007

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