August 21, 2014 / 2:41 PM / 3 years ago

Don't let them eat cake - UK's John Lewis cuts loyalty perks

LONDON, Aug 21 (Reuters) - John Lewis, Britain’s biggest department store chain, has dropped one of the key benefits of its loyalty card scheme - regular free tea, coffee and cake - less than a year after introducing the perk.

The 150-year-old group, whose worker co-ownership model has been lauded by Prime Minister David Cameron, launched its “my John Lewis” card to much fanfare last October, seeking to encourage loyalty and gather more data on its shoppers in exchange for rewards.

Benefits included free tea or coffee and cake, worth about 5 pounds ($8.29), in John Lewis restaurants each month.

However, the retailer said that for new card holders, and for about 1 million existing card holders, the monthly free tea or coffee and cake was no longer guaranteed and would instead depend on shopping frequency, spend, preferences and purchases.

“As we approach our busy Christmas period, we will be reducing the number of hot drink and cake vouchers issued to customers as our cafes and restaurants become extremely busy during this time,” John Lewis said.

“All my John Lewis member rewards are continually reviewed and the rewards our members receive in future do depend on a variety of factors.”

Loyalty cards, pioneered by Tesco’s Clubcard two decades ago, are widespread throughout Britain’s retail sector as they allow store operators to garner information on the likes and dislikes of their customers.

However, they are costly to run.

Earlier this month upmarket grocer Waitrose, John Lewis’ sister company, warned that a period of unprecedented investment would affect profits this year. Part of that investment covers the offer of daily free coffee or tea to holders of its ‘my Waitrose’ card.

Some sector analysts have speculated that incoming Tesco Chief Executive Dave Lewis would review the retention of the Clubcard.

But Morrisons, Britain’s No. 4 grocer, has said it will introduce a loyalty card for the first time later this year. ($1 = 0.6029 British Pounds) (Reporting by James Davey; editing by Tom Pfeiffer)

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