The O'Hara, Pa.-based grocery chain is now trying to repeat that success with foodperks!, a food discount program meant to build on the popular gasoline program. [image-nocss] But getting customers to change their lives and spending habits to fully exploit this newer offer seems more challenging, said the report.
"What they aren't doing is going to the maximum and taking full advantage of this," Lisa Henriksen, vice president of marketing for Giant Eagle, told the newspaper.
It's not that foodperks! has not changed shopper behavior. Fuel sales at the grocer's GetGo convenience stores as measured in gallons rose almost 20% after foodperks! was launched last year, the report said.
Loyalty card holders earn a 1% discount on Giant Eagle purchases for every 10 gallons of gasoline bought at a GetGo station. They can use up to 20% in discounts on a maximum of $300 in purchases on a single trip.
The grocer said discount users are averaging about 5% in foodperks! savings on a shopping basket of about $100, for a savings of $5, according to the report.
The marketing team thinks a 20% discount, added to offers such as double coupons and gasoline discounts, makes the chain competitive with mass merchants and discounters.
Jim Hertel, senior vice president of consulting firm Willard Bishop in Barrington, Ill., told the paper that his company's research shows a typical basket of groceries at a Wal-Mart Supercenter is generally about 15% lower than that at a traditional supermarket.
To get to the $300 maximum limit allowed by the foodperks! program, Giant Eagle officials concede customers might have to wait to do a really big stockup trip. "They would have to work to get there," said Henriksen.
"That's a pretty sizeable basket," said Hertel. Data that he has seen shows the average grocery basket is about $25 to $30. A really big shopping trip might reach the $100 range, he said.
"We don't really consider [$300] to be an achievable kind of basket on a regular basis," he said. To get there, customers would likely have to delay trips and then stock up on items that do not go bad quickly such as paper goods, detergents and canned goods.
At this point, the grocer is tinkering with its message and trying to educate customers on how to maximize food discounts, said the report. The company changed the program's name from Giant Eagle foodperks! to GetGo foodperks!, tying the image more closely to the convenience stores. It also has rolled out an ad campaign with the tagline, "Why go anywhere else?"
If customer feedback supports it, the company eventually plans to roll out the program to the rest of its stores, including those in the Cleveland area, the report said.
That is the sort of process the grocer used with its fuelperks! program, in which loyalty card holders earn a 10-cent per gallon discount for every $50 spent at Giant Eagle. They can then use those to buy up to 30 gallons on a single trip to a GetGo.
Technology provider, Excentus, Irving, Texas, worked on the original program with Giant Eagle and now licenses it to other chains. Winn-Dixie in Jacksonville, Fla., has a fuelperks! offering, as does Roundy's in Milwaukee, Ukrops in Richmond, Va., and Bi-Lo in Charlotte, N.C. Those grocers do not all offer the same perks, said the report.
Bi-Lo customers get 5 cents in gasoline discounts for every $50 spent at the grocery chain. Ukrops customers also get 5 cents and their discounts expire at the end of the month after the month they are earned.
Peter Lynch, president, CEO and chairman of Winn-Dixie Stores, told analysts on a February earnings call that the program should help his chain win sales from people pressured by the economic downturn. "Gas drives behavior in a big, big way," he told the paper.
BP is now part of a venture to expand the fuelperks! network into even more corners of the country, said the report.
Excentus, which provides similar technology and services to retailers such as Shop'n Save and Price Chopper, hopes the agreement with BP will take the fuelperks! program into other geographic areas as well as other types of retail. Before long, any consumer who earns fuelperks! will be able to "redeem their rewards at any reward redeeming participant site across the country," Scott Wetzel, vice president of marketing for Excentus, told the Post-Gazette
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.