Price Chopper was a trendsetter in the Wilkes-Barre, Pa., regional market when it instituted the deal in May 2008. Since then, three other local stores have followed suit, said the report.[image-nocss]
In addition to the Price Chopper and Sunoco marriage, Weis Markets has begun a partnership with Sheetz convenience stores, and Turkey Hill Minit Markets has started its own rewards program for customers to use at its pumps. And Redner's Warehouse Market has an agreement with the U.S. Gas station and Sunocos in the Reading and Allentown, Pa., areas.
Weis has been using its program at locations in central Pennsylvania for more than a year and rolling it out to more and more locations in its market. It started the program in the northeastern Pennsylvania market this month, the report said.
Customer value and rewards were the basis for the program, not what competitors have done, Dennis Curtin, spokesperson for Sunbury, Pa.-based Weis told the newspaper. "In today's marketplace, we focus on adding value to the Weis Club Card," he said, adding that "today, value is the name of the game." He said that in 2009, Weis customers saved $14 million through the program.
Mona Golub, spokesperson for Schenectady, N.Y.-based Price Chopper, said she did not have a comparable total, but said she was certain it was "significantly higher" than Weis' numbers. She told the paper that a recent internal report revealed that 250,000 Price Chopper Card holders used their card to get a gasoline discount on an average week, and the average savings by those customers is $7 per fillup.
Anthony Liuzzo, a professor of business and economics at Wilkes University, said the joint ventures are "a very logical, very intelligent move. Everybody benefits." Customers save money on a commodity they need to purchase, grocers gain customer loyalty and gas stations gain foot traffic that may stop in to c-stores to buy soda, food or lottery tickets. "You're encouraged to stick to one grocery store to gain the benefits of cheaper gas," he told the paper.
Golub agreed a customer may be more apt to go to Price Chopper as opposed to other markets, solely based on the fuel savings program. But she said low prices and customer service also factor in.
The partnerships between grocers and gas stations have caught on nationally as various regional grocery store chains have partnered with national and regional convenience stores and gas stations. Among them, affiliations between Kroger and Shell, Rainbow Foods and BP, and Supervalu's Bigg's stores in the Cincinnati area have offered fuel discounts through local Sunocos. Bi-Lo, Winn-Dixie, Ukrops, Roundy's and Ralph's also have fuel discount plans in place with gas stations. (Click here for previous CSP Daily News coverage.)
Elsewhere in Pennsylvania, Nell's Shurfine Grocery Stores in the York area has partnered with Rutter's 55 c-stores in central Pennsylvania, and Giant Eagle has discounts for shoppers at GetGo, a c-store chain the grocer owns.
Giant Eagle's program is what Price Chopper first based its own promotion on, the report said. Giant Eagle has also reversed the program so Giant Eagle club card holders can get discounts on groceries for every 10 gallons of gas they purchase at GetGo. (Click here for previous coverage.)
Liuzzo said he would expect to see additional retailers, not limited to grocers, developing similar programs with gas stations or other commodities. "A wise retailer would look for an opening like this," he said.
But Curtin and Golub warned the endeavor is rewarding but costly. "It's the most expensive promotional program we've ever been involved in," Golub said. "We pay for the bulk of the program. We pay for the gas, for the promotion, for the software."
Sunoco, she said, pays a small entry fee and has seen increased foot traffic, and even other stations affiliated with other oil companies, such as Exxon and Mobil, convert to Sunoco just to participate in the program.
John Marks, store director for the Redner's Warehouse Market in Edwardsville, Pa., told the Times-Leader that the company has agreements with Sunoco stations in the Reading and Allentown areas, but since that gasoline company is exclusively tied to Price Chopper in northeastern Pennsylvania, there was no gasoline card need in this area.
But in November, the owner of U.S. Gas approached Redner's and said he was willing to partner with at least the nearby Edwardsville store. The grocer accepted the officer, and Marks said customers have been taking advantage of the Gas Perks offer ever since.
Another gas station, the Pump & Go in Pittston, Pa., recently signed on with Redner's, too, said the report. The Scranton location of Redner's is not involved in the program because it has not partnered with any gas stations yet.
Gabe Olives, vice president of technology and petroleum marketing with Lancaster, Pa.-based Turkey Hill Minit Markets, said that since its rewards program was launched April 1, more than 300,000 people have requested a card. He said the programs in place with competing stations throughout its eastern Pennsylvania market contributed to its decision to implement the program.
As competition continues to grow, officials said the programs at Weis and Price Chopper are not going anywhere. "We made a significant investment in this program, and it will be around for the foreseeable future," Curtin said.
Loyalty programs are growing, Mike Gatti, executive director of the National Retail Federation's Retail Advertising & Marketing Association, added a separate report by The Patriot-News.
York, Pa.-based Rutter's Farm Stores has enrolled 160,000 people in its loyalty program, launched in September, president Scott Hartman told the paper. Purchases of 1,600 store items, from milk shakes to Martin's snacks, earn participants 1 to 10 cents off per gallon of gasoline.
"We've had customers with over $2-a-gallon savings come in and show our employees," Hartman said. "They like to brag about it."
Partnerships allow Rutter's customers to accumulate gasoline-discount points at Shur-Fine grocery stores and Smith Village Furniture in York, Hartman said.
Rutter's customers do not have to provide name or contact information, but registration comes with "greater values," such as entry into a gas giveaway, Hartman said.
(Click here for previous CSP Daily News coverage of loyalty programs.)
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