DALLAS -- As the price of gasoline jumps to over $2 per gallon, companies that handle gas-related promotions for supermarkets would be expected to observe an uptick in interest from sponsoring manufacturers. At least one is reporting just that.
"We certainly have seen spikes in manufacturer participation from the beginning of the year since gas prices have risen," said Renee Rubin, marketing communications manager for Centego Marketing here, which has created Fuel Rewards programs nationwide in approximately 1,600 locations. There has also been a surge of interest from gas stations looking for partnering grocery stores, she added.
"There is something magic about that $2 per gallon figure," Rubin said. "The minute gas prices go over that number, consumers are looking for alternate ways to fill their tanks."
When gas prices started to rise in February, Centego saw manufacturer participation increase by 20% in each of the next two monthly ad cycles, she said.
"There is a cost squeeze going on, and any retailer who can simply reward his customers with lower gas prices is going to have a competitive advantage," said Brian Woolf, president, Retail Strategy Center, Greenville, S.C.
Centego's programs allow consumers to earn free gas at a store's pump or at participating gas retailers by purchasing specified products. Free gasoline vouchers are printed in conjunction with grocery receipts. Vouchers are valid for 30 days, and can be redeemed collectively or individually at selected gas stations.
"We tend to see consumers save their vouchers and combine them to redeem in larger sums to have a more substantial savings at the pump," said Rubin. Consumers appreciate that there is nothing to send in or wait for, she added.
In the first four months of 2004, a total of $8.5 million worth of free gas was issued to nearly 8.4 million grocery shoppers through the Centego programs. Comparisons to last year were unavailable. Participating chains include Kroger, Meijer, H-E-B, Tom Thumb, Raley's and Bashas'.
Bashas', Chandler, Ariz., launched the program in January for 77 stores. "Bashas' emphasizes excellence in customer service, and we feel providing consumers with the ability to earn free Chevron gasoline enhances our commitment to them," said Christie Frazier-Coleman, Bashas' vice president, sales promotions and customer service. Promoted products at Bashas' are listed in a trifold pamphlet, which is available in stores and at participating Chevron gas stations, and at the shelf with Free Gas Rewards tags. A full list of participating stations and products is available at www.bashas.com.
Gas prices nationwide averaged $2.05 for the week ending May 31, 57.8% higher than last year at this time. These rising prices are affecting retailers, according to the National Retail Federation. "Retailers know that when consumers are forced to spend more of their disposable income on gasoline, they will scale back spending in other areas," said Tracey Mullin, president and chief executive officer, NRF, Washington.
Another gas marketing solution provider, CCISTech, Irving, Texas, allows retailers to introduce promotions without having to change the way they process transactions, stock shelves, or purchase from vendors, said Scott Wetzel, vice president of marketing and channel development, CCISTech.
"Technology can be a way of leveling the playing field for regional grocers," said Wetzel. Chains investing in CCISTech's fuel cross-marketing system include Giant Eagle, Buehler's and Harmons.
Like Rubin, Wetzel suggested that fuel-related promotional and customer loyalty strategies only succeed if the rewards are easy to collect. "Too many stores force shoppers to go back into the store after fueling their car and present a voucher to the cashier, who then deducts their discount from the transaction," he said.