Kroger, Safeway Link Gas, Gift Cards

DAN ALAIMO

CINCINNATI — Two of the biggest traditional supermarket chains have upped the consumer incentives in their fuel promotions, in both cases doubling the credits given for purchasing gift cards in stores. The programs, by Kroger Co. here and Safeway, Pleasanton, Calif., are to run through the holiday season.

The timing of the promotions was notable given the recent and dramatic downturn in gas prices, but the promotions were doubtless planned months ago when fuel was in the $4-a-gallon range. Even so, observers said gas promotions still have impact.

“For us, this is another way to help customers stretch their dollars during the holiday season,” said Meghan Glynn, Kroger spokeswoman. “We think customers appreciate any kind of savings in this economy, and giving shoppers an opportunity to earn more fuel discounts through gift card sales is timely and convenient.” Kroger also added pharmacy prescriptions to the program.

“Our goal is to provide maximum value to our customers,” said Safeway spokeswoman Teena Massingill. “By enhancing the PowerPump program with double rewards on gift cards, we enable shoppers to save even more money on fuel, whether they purchase gift cards to give as gifts or to shop for gifts with any of our gift card retail partners.”

Such offers are less compelling with gas at $2 a gallon than at $4, but “even though fuel prices may not be as big a deal now, certainly the overall economy is, and if customers can save money right now, then why not,” said Neil Stern, partner, McMillan Doolittle, Chicago. “This is obviously something that is aimed at the holiday season. So if you can save money on fuel and give somebody a gift, that feels like it is still a compelling offer.”

Predictions are for the worst holiday season in years, perhaps decades. But “regardless of the price of fuel, consumers will remember what they have been through over the past six or eight months. Memories are not short-term when it comes to pain,” said Don Stuart, managing director, Cannondale Associates, Wilton, Conn. “The holiday season is upon us and gift cards and holidays are a natural, so here's a way to help perk up what everyone predicts to be a dismal holiday season with some added incentive.”

The promotion was probably planned when gas was $4 a gallon, so “it is not ideal,” Stuart said. “But I think it can also work in this climate,” which although not an official recession, is close to becoming one. “Here's a way to get a bigger slice of a smaller pie and this season, it's best to get as big a piece as you can get.”

The fuel rewards, which began at the end of last month, are available in all banners of both companies. “We are offering our customers another way to help maximize their time, travel and savings this holiday season,” said Don McGeorge, president and chief operating officer of Kroger.

“In addition to rewards earned on groceries and prescriptions, our customers can now get double rewards on gift card purchases just in time for the holidays,” said Diane Dietz, Safeway executive vice president and chief marketing officer.