- 26 Aug
Kroger Expands Grocery Rewards Fuel Price Strategy To Shell
On August 19, 2010 I wrote a blog article discussing how critical it is for Fuel Managers to be diligent about adapting their fuel price management strategy in order to quickly react to the constant changes in their fuel markets. One example I gave is how fuel retailers are adapting fuel rewards programs, allowing them to gain market share without having to adjust their fuel price management strategy.
Today Kroger announced the expansion of their fuel and grocery reward program to 48 Shell stations in the Roanoake Valley and Lynchburg areas of Virginia. Customers accumulate points on their Kroger loyalty cards when they purchase groceries, and points can be used for cash discounts at the pump.
Carl York, a spokesman for Kroger’s mid-Atlantic region office in Roanoke said “Fuel is definitely important to us. We’ve learned that it’s a nice fit with the grocery business. We can drive grocery sales by providing fuel centers. This partnership with Shell allows us to have a bigger footprint to make our fuel promotion more impactful”.
This is another example of the volatility in the fuel market. Fuel Price Managers who compete against Kroger need to carefully monitor the impact this reward strategy has on the market. As we all know, consumers love a fuel bargain, and they will travel out of their way to cash in their discounts. Competing c-stores may need to adjust their fuel prices down to minimize any loss of market share.