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Kroger's Fuel Rewards Could Benefit Its Private Label

June 21, 2011
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Kroger Supermarkets has expanded its fuel rewards program to the Dallas-Fort Worth area.


Kroger Supermarkets has expanded its fuel rewards program to the Dallas-Fort Worth area. The program, which offers points on gift cards, prescriptions and groceries, can also help the Cincinatti-based grocer promote its private label brand, according to Paula Rosenblum, managing partner at Miami-based  Retail Systems Research (RSR Research).
 
Kroger can begin promoting its private label via fuel rewards by offering free private label items with the purchase of a national brand, according to Rosenblum. Further growth can also come from offering extra points and rewards for buying its private label, she adds.
 
"Kroger could, at some point, offer more points for buying its private label stuff, but I would wait a while before doing something like that," states Rosenblum. "First you want to get the customer engaged."
 
The fuel rewards program currently drives engagement by offering a savings range of 10 cents to one dollar savings per gallon for every 100 points customers earn on their Kroger Plus card. Even more aggressive offers, such as offering 100 points for every $100 spent on Kroger products, are also offered with the 1-2-3 REWARDS MasterCard.
 
Similar tactics, such as offering frequent buyer points, can be used for the growth of the company's private label, states Rosenblum. "That's [offering frequent buyer points] not a bad way to begin: "get an extra 500 points for buying $x of private label something-or-another.”

 

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