Getting to know you

Your supermarket probably knows more about you than your partner, mother or doctor

Who do you think knows most about you - your partner, mother, doctor, shrink or Tesco? If you shop at the supermarket, it could be the latter. If you also use Tesco's mobile phone and banking service, it almost certainly is.

The supermarket's upcoming annual general meeting will be a magnet for widening criticism. Even the Sun recently raised an ironic journalistic eyebrow at how Tesco has destroyed the viability of the traders' market in the East End where the supermarket chain's founder, maverick entrepreneur Jack Cohen, originally started his fruit and veg stall. Their stores crowd the landscape and high street, but a less visible threat emerged when someone knocked at the house of Lynn Pierce, a grandmother 13 times over.

The last thing she expected to see was a policeman at the door. Two days earlier at Tesco in Holyhead, she had bought flowers for her mother's grave. But, unknown to her, her movements were monitored. At one point Pierce stuffed her scarf into her bag. Tesco staff tracking her movements with CCTV thought she was stealing. Because Pierce used her Tesco Clubcard when paying, the store had all the information it needed. Her address was traced and passed to the police. They quickly realised Tesco's mistake. But Pierce reported her outrage to the Daily Mail and was still angry two years later when Channel 4's Dispatches programme found her.

That example was just an early sign of an unprecedented season of data collection, monitoring and surveillance, the results of which are concentrating into ever fewer, more powerful hands. We have come a long way from the lick and stick of Green Shield stamps that Tesco introduced in 1963.

Today, in eight out of every ten trips to Tesco, shoppers use a Clubcard. There are around 25 million of these loyalty cards in existence, representing 14 million households; more than 11 million of the cards are in active use.

Shortly before its fall, the German Democratic Republic police state had a population of around 16 million. In all probability, Tesco holds more files on British citizens than the east German state held on its people.

The Clubcard enables Tesco to keep a record of each holder's name, age, address, telephone number and email. The company knows each holder's dietary preferences and the make-up of their family. It keeps track of exactly everything a cardholder has ever bought, from which store, and the precise date and time of each purchase.

From the data, Tesco can guess whether you had a lonely singles' night in, or threw a party at the weekend. It will know if you have a drink problem, buy condoms, whether you're a junk-food addict, hooked on painkillers, or have an undue fondness for tinned pineapple. The card will keep a record of any complaints made or other communication with the store, and any additional market research you have taken part in.

The information helps Tesco to typecast its customers by analysing their "life stage", whether student, young family or retired. It assesses how much they are worth to them, by spending and loyalty. It works out if they are "upmarket", "market" or poor (or, as Tesco euphemistically calls this category, "cost-conscious").

Being able to classify groups in this way has helped Tesco become the UK's dominant retailer.

If you also have a Tesco mobile phone and bank account, think of the potential for an unparalleled convergence of data. In addition to the above, there will be a record of all your movements: every conversation you have with friends, every company and service you call, and when, where and for how long; plus everything you buy with a bank card and every service you pay for.

But, as if this were not unsettling enough, there is worse to come.

The advent of radio frequency identification tagging (RFID) now also means that with tagged goods the store can, at all times, "locate the product, tell when it goes out of date, if it has been paid for and even if it has been recycled by a customer after use".

An even darker twist to all this surveillance emerged when the UK government let it be known that it planned to link proposed compulsory biometric identity cards, designed to help control immigration, to the data contained on supermarket loyalty cards.

The possibility of allowing two-way data traffic between the government and major corporations such as banks and supermarkets was floated. Information contained on the national identity database, set up to underpin the ID card scheme, would be made available to companies for a price.

The political attraction of such a scheme for the Home Office was clear because, in the other direction, the police could be alerted the moment someone who was the target of an inquiry made use of a loyalty card at a checkout or bank card at a cash machine.

There may be data protection laws, but the truth about information is that once it is collected, its use becomes irresistible to those in power.

So, the next time you are bargain-hunting for double Clubcard points on cut-price bananas, remember the proud boast of a certain Tesco marketing manager who said: "The scheme is driven by this simple piece of plastic, but every time you shop with us we record all there is to know about you."

Andrew Simms is author of "Tescopoly: How One Shop Came Out on Top and Why It Matters" (Constable & Robinson, £7.99) and policy director of the new economics foundation

This article first appeared in the 25 June 2007 issue of the New Statesman, Israel, Gaza and a summer of war?