THE MANY WAYS TO LEVERAGE ADVANTAGE FROM FUEL SALES 2004-08-30 (1)

David Merrefield

Supermarkets have been sprouting parking-lot fueling centers for a while now as retailers increasingly turn to them in a bid to enhance profit and build ancillary benefit.

As you'll see in this week's news feature in the Technology & Logistics section on Page 42, it must be working. The proportion of food retailers offering fuel sales is about 10%, a 4% increase against the previous year. That's because the idea that profits can be gleaned from fuel sales is evident on its face. But many retailers are also making sure business at the pump supports the store, and the reverse.

Moving shoppers from the pump to the store, or in the other direction, can be done by offering a discount on fuel with the presentation of the store's loyalty card, or a discount on food product with the purchase of fuel.

Another method that can be used to lock in shopper loyalty is to offer a gift card that could feature a discount available at the time of use. Some retailers offer gift cards at either the outside pump or from inside the store, further enhancing the possibility of moving traffic back and forth.

Apart from these methods that involve the direct operation of a fuel center, other retailers have linked to non-owned fuel stations. One supermarket retailer mentioned in the feature set up a discount program with a nearby fuel retailer. Shoppers who buy selected and marked product from the supermarket can use their receipt to obtain discounts from 2 cents to 35 cents a gallon of fuel at the nearby dealer. Another supermarket operator established a similar promotion in conjunction not only with the fuel centers at its stores, but also with those of a convenience store operator in the town.

All these situations, of course, have a technology implication. For these systems to work, data has to move from the pump to the store, and sometimes the other way. Take a look at the news feature for more on that.

PRODUCE ETHICS

Now on to something different: produce ethics. Who knew produce posed ethical issues? But such an issue was contemplated earlier this month in "The Ethicist" column that appears weekly in the New York Times Sunday magazine. The column addresses questions of ethics raised by readers' letters. One letter writer asked if it was acceptable to strip the stem off a mushroom cap at the point of display to lower its weight and cost. The ethicist replied, facetiously, "I'm with you. That's why when I go to the supermarket, I bring my boning knife to trim those pork chops so I can get just the meat; surely bone lovers can grab the bones for themselves."

In a serious vein, he went on to explain that "the store sets the per-pound price [of random-weight mushrooms] assuming people will weigh and pay for the mushrooms with stems as displayed. Were they to sell caps only, they would charge more per pound."

Good explanation. Otherwise, why shouldn't shoppers core apples or peel bananas in the store to score a discount on random-weight product, in addition to grazing?