In a bid to get a larger cut of the supermarket pie, grocery giant Coles revamped its flybuys loyalty programme that offers faster rewards or cash discounts and no expiry dates.

An average Australian family would save $200 a year on grocery shopping, Coles estimates. However, they could double their savings to $400 a year if the shoppers would combine their bonus points from partners, a linked credit card and Coles insurance.

For shoppers whose grocery bill exceeds $50, cardholders can lock in discounts on five products which they will handpick under the my5 programme. The items are locked in for the next six months. The cardholders have 5,000 items to select from for which they will get a 10 per cent discount.

The revamped programme seeks to address shoppers' criticism that points under the old loyalty programme takes years to redeem and all they get in return are petty products such as toasters. With the Flybuys programme, beginning Monday, cardholders would get one point per dollar spent, said Coles Managing Director Ian McLeod. It is an improvement from the old point system launched in 1994 in which shoppers earned two points for every $5 spent. He explained that under the revamped programme, shoppers would get 15 cents of value for every $30 spent with Coles and its partner retailers compared to the 9.6 cents under the old programme.

In a comparison with Woolworths' loyalty programme, The Sydney Morning Herald noted that the revamped Coles programme appears to be superior because the offer by Woolworths is limited to frequent flyer points with Qantas.

The paper attributes the superior programme offered by Coles to its chief financial officer, Tony Buffin, who has deep experience in loyalty programme businesses and data analytics as the former boss of Groupe Aeroplan in Europe.

Points would also be earned by shoppers when they buy at partner shops such as Kmart, Target and Liquorland, travel Web site Webjet, energy provider AGL and telco Telstra. The points could be redeemed at retailers owned by Wesfarmers or to book any seat on any flight from Webjet.

To boost the number of Flybuys members which has gone down to 5 million from 10 million, Coles mailed 16 million new cards to Australian households.

"Lowering prices has been central to our recovery strategy over that last four years, and the relaunch of Flybuys is an integral part of that value investment.... There's a limited number of people who are interested in collecting points just for flights - what they really want is value in the supermarket and to get cash back at the till," The Australian quoted Mr McLeod.

Consumers watchdog, Choice, cautioned shoppers to avoid buying only for the rewards; rather, they should look for best values because reward programmes of supermarkets are designed to draw consumers back to the stores, said Choice spokeswoman Ingrid Just.

She added that loyalty programmes also provide supermarkets a lot of valuable data such as the demographics of the buyer, items they purchase and hours of shopping.

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