Coles Myer to phase out shareholder discounts
Coles Myer is to phase out its shareholder discount programme and divert the savings to benefit all staff, customers and shareholders equally.
In a major loyalty review, Australian retail group Coles Myer is to phase out its shareholder discount programme, which was introduced in 1993. To join up, consumers have to hold at least 500 Coles Myer shares; they then qualify for discounts on their shopping at the group's stores. By October 2000 shareholder numbers had increased nine-fold from some 62,000 to 565,000, of which 400,000 (71%) held between 500 and 1000 shares.
Gone by July 2004 In this week's outline of the company's strategic review, CEO John Fletcher said that continuation of the CML shareholder programme in its current format is not in the longer term interest of all stakeholders; nor does it reflect how other loyalty programmes are structured. The programme will be phased out, with reducing discounts, from the end of this July until the end of July 2004. He says: "Underlying this decision is an understanding that loyalty programmes need to be equally accessible to all customers while at the same time showing that Coles Myer is committed to treating all customers, shareholders and staff fairly."
Management claims that the savings from reduced shareholder discounts will be diverted to sustaining price competitiveness, promotional activities, interest free offers and enhanced Fly Buys and Coles Myer (account) Card offers.
Following the announcement, Coles Myer shares fell by Aus$0.34. It operates more than 2,000 stores, including Myer, Coles, Kmart, Target, Grace Bros., Bi-Lo and Liquorland in Australia and New Zealand. Sales in 2001 totalled some Aus$24 billion.