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
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.