As gas and food prices soar, consumers are looking for retailers that ease some of their cost concerns with targeted offers and rewards.
In May, gasoline prices rose 466% more than consumer prices overall year-over-year, and fuel oil prices inflated 12 times more than item prices across all categories, according to data from the Consumer Price Index for All Urban Consumers (CPI-U), reported by the US Bureau of Labor Statistics (BLS) last Friday (June 10).
Specifically, while the price of all items increased by 8.6% over the previous 12 months, the price of gasoline of all types increased by 48.7% and the price of fuel oil increased by 106 .7%. In fact, prices are even up significantly month over month, with gasoline prices in May up 4.1% from April and heating oil prices up 16.9%.
Kroger, the largest neat grocer in the United States, is using its fuel rewards program to lure customers amid rising inflation concerns.
In addition to expanding its private label offerings to appeal to cost-conscious consumers while increasing margins, the grocer also sees benefits from this rewards program, as evidenced by its record engagement, said Rodney McMullen, CEO and president of the company, to analysts. on a call Thursday, June 16, discussing the grocer’s first quarter 2022 results.
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“Our loyal customers are using our fuel rewards program more than ever, and in fact, more than 600,000 additional households signed up for the first time this quarter,” McMullen said.
Additionally, these fuel rewards leverage one of consumers’ top concerns to get them to engage with Kroger’s loyalty offerings, giving the grocer valuable insight into their buying behavior and allows it to better personalize its offers in the future.
Kroger isn’t the only brand leveraging gas deals to drive enrollment in programs that create more value for the retailer. The grocer’s main competitor, Walmart, the world’s largest grocery retailer, is offering members of its Walmart + program 10 cents off per gallon of gas at more than 14,000 gas stations across the country in the purpose of generating subscriptions.
Read more: Walmart entices subscribers with deeper gas discounts
While Walmart announced this strategy in April, Kroger launched a fuel rewards program with Shell as early as 2010. In November 2021, the grocer began piloting a two-tier membership program across three of its divisions, doubling fuel points and free delivery for a fixed annual fee. The demand for fuel rewards has helped this program attract members.
“We are encouraged by the number of new members in the current four pilot divisions,” McMullen said. “Importantly, delivery sales increased significantly compared to non-Boost divisions, and delivery retention improved by approximately 600 basis points. Due to this early success, we are proud to announce today that Kroger Boost will be launching nationwide starting in the next few weeks.
Grand grocer Albertsons also offers gasoline rewards.
“Fuel rewards are incredibly powerful,” Albertsons CEO Vivek Sankaran told analysts on an April call to discuss the company’s fourth quarter 2021 results. one of our best yields and one of the biggest grip drivers.”