Woolworths cost cutting with reward program changes, say analysts

Supermarket giant Woolworths is gearing up to relaunch its reward partnership with Qantas Frequent Flyer after shelving the deal and overhauling its customer rewards program six months ago.

Deutsche Bank has estimated the cost of the program to be $500 million annually and the Qantas tie-up to be worth up to $80 million per year.

"You are seeing a lot of companies trying to make changes to their loyalty programs, partly to reduce the costs of them and perhaps in some way slightly wind them down," said Professor Byron Sharp from marketing institute Ehrenberg-Bass.