Supermarket loyalty schemes.

Ellylanes1

More and more supermarkets are offering discounts via their 'loyalty' schemes.
As they almost all now offer this, in various guises why don't they simply lower prices in general?
With the cost of living being so high and food prices being one of the main factors, it would seem to me the companies are able to slightly lower prices if they can offer these discounts, then we could choose what we want to buy without being 'encouraged' to buy what they want us to.
I hope this makes some sense to more than just me.

As they almost all now offer this, in various guises why don't they simply lower prices in general?

The reason they don't lower prices in general is because, if they did, it would be a race to the bottom between them. Supermarket 'A' would lower its prices, supermarket (B) would lose customers so would therefore have to lower its prices to win them back. Leaving Supermarket 'A' to lower its prices again, even further. So in the end, all supermarkets would lose out because they'd all be lowering their prices.

That's why they develop these reward schemes instead.

I'm a bit of a tart when it comes to shopping!!

I do shop around and take advantage of offers and loyalty schemes and save them up for food shopping at Christmas.

But I think we are all in shock at how much food prices have risen - we are now more inclined to put stuff back rather than pay massively inflated prices or downshift the product to try a cheaper version.
But from memory on various holidays abroad - food always seemed dearer there or maybe we were spoilt with lower prices in the UK.
But I do see OP's point of just discounting prices rather than giving cards which will potentially reduce specific products for a week or two but only if you use the card!

Loyalty schemes are data collection exercises, the discounts are an incentive to give them your data.