Food giant Woolworths has topped off a rocky 2015 by succumbing to consumer pressure to reinstate a version of its Qantas frequent flier points, months after dumping it for a heavily criticised cashback scheme.
The retailer on Tuesday announced a six-year deal which will allow customers to still earn “Woolworths Dollars” discounts, but they can now choose to automatically convert them to Qantas Points.
The previous Qantas scheme was dumped in October, and the retailer was hit by a barrage of social media criticism amid accusations the Woolworths dollars scheme did not give customers significant savings.
“Consumers are starting to get pretty frustrated with Woolies and they have to be careful,” said Tom Godfrey, spokesman for consumer watchdog Choice.
“The market is every competitive, Coles seems to be beating them on like-for-like and those two just follow each other; you’ve got Aldi there, IGA price matches.
“It’s been a very tough 2015 for the big retailer.”
Woolworths said the revamped program is delivering for customers, with encouraging results including strong member growth and increased scan rates at the checkout.
It has been reported Qantas and Woolworths have been in talks since the food-giant announced its new scheme in October. Woolworths dollars award customers who purchase select orange ticketed items, amid complaints from some customers there were too few orange tickets products.
"This new agreement means our customers can choose from two great options," Woolworths Food Group managing director Brad Banducci told Fairfax.
"Those who prefer cash back can continue to use Woolworths Dollars to get money off their shopping, while avid points collectors will have the option to convert their Woolworths Dollars into Qantas points at a very attractive rate and with no minimum spend."
The announcement comes after a stormy year for Woolies.
On Thursday Woolworths was forced to deny wrongdoing after Australian Competition and Consumer Commission (ACCC) accused the retailer of seeking more than $40 million in "payments" from suppliers to help narrow a shortfall in earnings.
The ACCC said the scheme, which involved 821 suppliers, was in contravention of consumer law.The ACCC said it was seeking an injunction requiring Woolworths refund suppliers and pay related costs.
Last month Chairman Gordon Cairns apologised to shareholders for “frankly unacceptable” 2015 profit results, which revealed flatlining sales and an expected fall in profit of between $900 million and $1 billion in the first six months of 2016.
“We have made some mistakes, acknowledged those mistakes, publicly learned from them, and now are going about fixing them,” he told the company’s AGM in Sydney.
In April the retailer angered customers with an Anzac Day advertising campaign that branded photos of Anzacs with the Woolworths brand and the phrase “fresh in our memories.”
Veterans Affairs Minister Michael Ronaldson called the campaign inappropriate and asked them to take it down.
The fresh food people landed themselves in the compost heap again in November when fitness personality Michelle Bridges appeared in an ad for the food giant and called people who grow their own food “freaks”.
October’s announcement of Woolie’s new rewards scheme was met with intense online criticism after 50,000 people liked a customer’s Facebook post pointing out the lack of savings.
“As soon as you start to see these things bleed out on social media, and these things gaining traction, clearly it’s a very high tide for Woollies at the moment,” Godfrey said.
“If they’re going to fight back and compete we’re going to need to see a better 2016 from them.”