The news: Kroger is revamping its loyalty program as it works to make its value proposition clearer and more tangible for shoppers.
Members can now redeem their points for grocery savings after previously being able to use them only for fuel rewards. Every 100 points translates to either $1 in grocery savings, up to $10 per day, or 10 cents per gallon of fuel, up to $1 per gallon.
Shoppers can maximize their points with limited-time offers throughout July, including quadruple points on Fridays through July 24 and from July 1 to July 4.
What it means: Kroger’s loyalty update is an important move as the retailer looks to protect its market share. It puts Kroger on par with competing grocers, like Albertsons and Giant Food, that already allow shoppers to turn points into grocery discounts. It also gives shoppers more incentive to spend with Kroger, which could help reduce the flow of grocery dollars to mass merchants like Walmart and Target.
A stickier loyalty program could also make Kroger a more valuable retail media partner. Nearly all—95%—of transactions at the retailer are tied to a loyalty card, enabling it to offer deeper insights into purchase behavior and incrementality, CEO Greg Foran said on the company’s Q1 earnings call.
Implications for retailers: Kroger’s loyalty program update points to the pressure on retailers to make value clear and easy for shoppers to understand in the current era of uncertainty. Ultimately, it’s one of several steps Kroger is taking to better compete with Walmart and Costco, which includes making its biggest price cuts in years as well as improving customer service and speed. Those efforts could take hold with shoppers: Nearly half (48%) say lowering prices is the top action retailers can do to keep their loyalty, according to Bread Financial.
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