Must-know money: how supermarket loyalty cards influence your decisions

From central London house prices falling, to supermarkets influencing shoppers and what UK unemployment and wage growth changes mean for you – here are our favourite must know money stories this week to help you get your head around your personal finances. 

Central London house prices suffer 

Central London property prices dropped almost 5% in the 12 months to March, reports Joshua Oliver for the Financial Times. This was the largest annual fall in three and a half years, with the price of property in prime areas of London dropping to £1,261 per square foot last month, down from £1,326 a year earlier. 

According to data provider LonRes, this is the lowest level since mid-2021. Anthony Payne, managing director at LonRes said: “The steam has come out of the market. It was a bit inflated last year.” 

Buyers have become more cautious over concerns prices could still fall further thanks to a combination of factors including concerns over the economic outlook and rising interest rates. 

James Forbes, director at London estate agency Forbes Gilbert-Green expressed his longer-term concerns around London maintaining its position as a global financial centre. ‘Brand London’ is the core of the housing market in Central London, and it is essential for it to remain positive to drive investment, he said.  

How supermarket loyalty cards influence buyers 

Gone are the days when loyalty cards encouraged shoppers to build up points to redeem at supermarkets. Now, supermarkets are rewarding financially-stretched customers with immediate discounts in the hopes of retaining their business, amidst the soaring cost-of-living, writes Kevin Peachey for BBC News.  

Supermarkets – such as Tesco, Sainsbury, and Boots – have repositioned their customer loyalty strategies toward day-to-day discounts, to try and compete with other discounters. Even the discount labelling is carefully chosen – for its warm and welcoming ‘yellow’ colour – attracting customers eyes and marking a change in tactics by retailers. 

However, the pitfall for shoppers is that these loyalty card discounts make it more difficult to compare prices and work out value for money. 

Consumer insight specialist Kate Hardcastle said that supermarkets: “Are reminding you that if you are loyal, they are literally treating you differently as a customer. They want a narrative that they are the best and the cheapest.” 

Retailers are also exploring potential options for loyalty programmes to reward sustainability. The clear benefit for companies is that they can meet their eco targets and boost sales because loyal shoppers will return to the brand for their next purchase. 

What do UK unemployment and wage growth mean for you? 

Wage growth remained at 5.9%, a higher level than expected, according to data from the Office for National Statistics (ONS). However, this could prompt the Bank of England to hike interest rates again, reports Nicole Garcia Merida for Money Week.  

While growth in regular pay, excluding bonuses, held at 6.6% as of February 2023, inflation has been eating away at pay growth. When adjusted for inflation, real pay fell 2.3%, and total pay fell 3%. 

Unemployment rose slightly to 3.8% from 3.7% in January, reflecting business uncertainties as employers held back on recruiting due to economic pressures.  

The International Monetary Fund (IMF) expects the UK economy to shrink by 0.3% this year. Since the end of 2022 the UK economy has remained largely stagnant. Rising wages will mean businesses might continue increasing prices, pushing inflation higher and prompting the BoE to continue hiking rates.  

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