Woolworths' new rewards program has the potential to deliver double the benefits than Coles' loyalty scheme.
In a bid to wrest back customers and regain lost market share from Coles, Woolworths has dumped its Qantas Frequent Flyers rewards for more food and liquor discounts for loyal shoppers.
The supermarket giant will replace its Everyday Rewards card with a new scheme called Woolworths Rewards that allows shoppers to earn $10 off their groceries.
Customers will earn "Woolworths dollars" when they buy items marked with an orange ticket at Woolworths and BWS stores.
When they reach eligibility for a $10 saving, that amount will be taken off the customer's next shopping bill.
Woolworths says surveys of its customers found 68 per cent wanted cheaper groceries compared to nine per cent who wanted frequent flyer points.
Based on a $250 spend a week for the average family, Woolworths Rewards offer more value than Coles' Flybuys scheme, Canstar Blue finance editor Justine Davies told AAP.
Ms Davies said based on assumptions and depending on how Woolworths implements its orange ticket scheme, it would take more than three weeks for the average family to receive $10 off their grocery bill.
"On face value, the new Woolworths scheme could deliver twice as much benefit as Coles' Flybuys," she said.
"For a $250 dollar spend a week, $13,000 a year, you expect to receive about $65 back per annum.
"While with Woolworths Rewards, you would be spending about $6,500 to get that $65, so essentially you should get twice as much back as the Coles Flybuys."
She said Woolworths' change in rewards could well equal a change in consumer behaviour.
Coles Flybuys general manager Adam Story said Flybuys had an advantage in that it gives members the choice to earn rewards in thousands of places when buying some of Australia's biggest brands including Kmart, Target, AGL, Telstra, OPSM, Medibank and NAB.
"When redeeming their points, members can also choose from hundreds of reward options, including using flybuys dollars to pay for their shopping or to receive gift cards, products, lifestyle experiences and travel," he said.
He said the average member also earned more than two points per dollar spent at Coles.
Woolworths will end the Qantas Frequent Flyer scheme on December 31.
Qantas said it was still working with Woolworths on a new partnership from 2016.
