Retail News: Matalan to broaden loyalty programme

Matalan is adding to the benefits of its reward scheme in an overhaul it hopes will stem its haemorrhaging sales.

The discount retail chain is testing the scheme in its Scottish stores and plans to extend it to the rest of its 190-strong estate from next year.

The initiative follows disappointing results; last month it disclosed that sales fell 7.4% in the 26 weeks to 25 February, with clothing sales down 4.5% and homewares slipping 7%.

The scheme will offer consumers reward points for money spent, as well as in-store offers, prize draws and third-party affinity deals. The initiative it replaces provided only third-party offers through the post.

Matalan's highest-spending customers will be given a new card and key fobs to replace their existing cards, although the benefits of the scheme will be open to all card-holders.

The scheme is being implemented by below-the-line agency TDA, which will run a direct campaign for the national roll-out that will target Matalan's existing customers. The agency won the retailer's business last November.

The loyalty scheme is part of a wide-ranging plan to improve the company's performance. It has also earmarked some of its stores, such as its Wood Green branch in North London, as dedicated clearance outlets.

Following last month's poor sales results, there has been speculation that Matalan founder John Hargreaves, who owns 53% of the company, would take it private. The retailer has been valued at £900m.

Matalan is currently seeking its fourth chief executive in five years to replace John King, who announced in January that he was leaving.