How supermarkets get your data – and what they do with it

It doesn’t matter if you are part of a loyalty scheme, pay by card or even cash, ‘Big Brother’ supermarkets know your every move

Illustration: Jonathan Edwards

We all know supermarkets use information about our shopping habits to target us with personalised vouchers and offers – but how would you feel about sitting down to watch a movie and being confronted with adverts based on what was in your shopping trolley a few hours earlier?

Or what would you think about Tesco using its Clubcard database to check what you are eating, and possibly offering vouchers for salad and fruit if your basket is usually groaning with unhealthy items?

These are just two of the ways the supermarket giants are planning to make use of the data they gather on us.

For every loyalty point or coupon that Sainsbury’s, Tesco and the like dish out, they gobble up a huge amount of information about our shopping habits. We are all familiar with targeted offers linked to loyalty cards, but you might be surprised at the amount of data the big retailers collect on all of their shoppers – and even potential customers – and what they do with it.

If you have opted out of taking out a loyalty card because you don’t want “Big Brother in your shopping basket”, then too bad, because the supermarkets also track debit and credit card payment data and till receipts – so someone, somewhere, knows about that bottle of wine you bought at 12.28pm on Tuesday, and that you recently switched your brand of athlete’s foot cream.

How do the supermarkets use this data?

If you have a loyalty card or shop online, the supermarkets will build up a demographic profile of you, and collect data about how loyal you are, what you buy and how much you spend, says Guy Montague-Jones of The Grocer.

They can then change what you see when you log in to make it easier to find the products their data suggests you will buy, and in-store they will use their data to make decisions about what they sell.

For example, Sainsbury’s discovered that a cereal brand called Grape-Nuts was worth stocking – despite weak sales – because the shoppers who bought it were extremely loyal to Sainsbury’s and often big spenders.

Tesco plans to use Clubcard data to target specific foods at customers. Photograph: Joe Fox/Alamy

Last month the supermarket giant announced it was taking full control of Sainsbury’s Bank by buying the 50% it didn’t already own – partly because its data showed that after taking out a bank product, Sainsbury’s shoppers became more loyal and spent more in-store.

Tesco, meanwhile, is using data about what its 16 million Clubcard holders buy in its stores to serve targeted ads to online users of its new free movie service, Clubcard TV. Launched in March, this streaming site also offers TV shows such as The Only Way is Essex, and is available to anyone with a computer and a broadband connection.

But in order to tune in, you have to register your Clubcard number and postcode. Clubcard TV director Scott Deutrom boasted on his blog that “we can target adverts based on what our customers bought yesterday” (a Tesco spokesperson later claimed this was just “a vision” at the moment).

A few days ago it emerged Tesco also plans to use its Clubcard data to tackle obesity, and “wants to see whether customers would welcome tailored suggestions for how they could shop more healthily” – which could mean vouchers for healthier products or suggested recipes (customers would need to opt in, it says).

What if you haven’t given the supermarkets your personal details?

Even if you haven’t handed over your details and product preferences through a loyalty scheme, it’s likely you have used a debit or credit card to pay for your shopping at some point – and this is another way that the supermarkets can track what we buy.

“We know that an anonymised card number paid for a particular basket of groceries one week and how much was spent with the same card number the following week,” says a Morrisons spokesperson. “It means we know when customers are lapsing because we won’t see their card for a week. We use it to measure the effectiveness of promotions and events.”

When asked whether its customers give permission for their card numbers to be tracked in this way, the supermarket says customers “would only need to opt in” if Morrisons intended to send them any form of communication.

“All the large grocers track payment cards in this way,” says Matthew Harrop at data analysis firm emnos. “All your till receipts are linked together using either a known customer identifier – or anonymously in the absence of a loyalty card – to analyse what you’re buying and how loyal you are.”

Waitrose and Asda also admit analysing aggregated payment card data to monitor “customer shopping patterns” (for example, items purchased) over time. Both stress this is common practice in the retail industry and that card numbers are not connected to an individual or an address. Sainsbury’s and Tesco say they do not track or monitor their customers’ payment cards.

The supermarkets also want to find out what their customers are doing outside their stores. Waitrose, for example, paid data analytics firm Beyond Analysis to use “aggregated and anonymised data” about shoppers’ Visa card transactions to help it decide on new store locations.