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Kroger now Requires Card for Discounts at all of its Stores
(This is a reprint of an original article from the archives of the Roanoke Times website at http://www.roanoke.com)The Roanoke Times, Virginia Nov. 9
Kroger customers can no longer buy items on sale or enjoy coupon bargains without displaying a discount card that enables the company to track their purchases on a computer.
Sign-ups began Sunday for the Kroger Plus Shopper's Card. When swiped through a reader, the card qualifies its holder for discounts on certain items, coupons and giveaways. It must be presented at checkout to receive double and triple coupons.
Kroger will gain valuable information by entering cardholder purchases into a database. Kroger intends to use that information -- like a huge collection of checked-off shopping lists -- to improve marketing, advertising and purchasing.
Food Lion, the second leading Roanoke Valley grocery chain behind Kroger, offers a similar card, as do many other grocers.
Some shoppers hesitated to sign up, telling Kroger they were afraid the data would be sold to other companies. Kroger promises it will not. But most were pleased to enroll, Kroger spokesman Archie Fralin said Monday. He said in other communities where the program is offered, the vast majority of customers participate.
Kroger employees have been replacing the red shelf tags that the store has traditionally used to highlight sale prices with new tags highlighting cardholder discounts. Kroger regularly advertises 90 to 150 better-selling items weekly at sale prices. The number of items on sale won't increase -- except during an introductory period -- but certain prices will be lower than ever, Fralin said. And the deeper discounts will continue after the introductory period, he said.
Five pounds of sugar is selling for 88 cents this week, a record low and less than half the regular price of $1.99, Fralin said. Barbara Kelley of Roanoke had one in her basket at the Cave Spring Corner store Monday. When asked what she thought of the program, she pointed to it.
"If it's a savings to the customer, it will be real good," said her mother, Patricia Kelley, with whom she was shopping.
Kroger also will be tracking the Kelleys', and other customers', their purchases and tailoring coupon offers to them. The Kelleys liked the sound of that.
But another shopper was less impressed. "I would like to believe I'm saving, but I doubt that I really am," Judy Gray of Roanoke County said. She accepted a card anyway.
Kroger, the nation's largest grocery chain with sales of $28 billion last year and profits of $411 million, hopes the program lures other chains' customers, gives regular customers another reason to stay and drives sales higher, Fralin said.
"With 14 Food Lions and a couple of Wal-Mart supercenters and a couple of Winn-Dixies, we still consider the Roanoke Valley to be a competitive market, " he said.
Kroger, based in Cincinnati, Ohio, sells more groceries locally than any other chain and has 50 percent of the market, said Ken Gassman, retail analyst at Davenport & Co. of Richmond. It bought the Roanoke Valley's only two Harris Teeter stores six months ago, bringing its total to 11.
Consumers shouldn't pass up discount cards, Gassman said. "These are free. They give you discounts you wouldn't get otherwise," he said. Added supermarket industry consultant Neil Rayful: "The consumer's giving up a bit of privacy in order to be rewarded."
Rayful, of Rayful Marketing in Atlantic City, N.J., said grocery chains have kept their cardholder data to themselves, as promised. To disclose it would risk a backlash, he said.
Privacy-conscious customers have options. They can check a box on the card application to elect not to receive mailed coupons. For that matter, nothing prevents a customer from receiving a card under a fictitious name, address and phone number, Fralin said. No identification is required to sign up.
Kroger will invite customers to swipe their cards whenever they shop, even if they aren't buying anything on sale. Fralin said this qualifies them for future giveaways and a current sweepstakes. However, the sweepstakes, in which a sport utility vehicle will be given to one shopper from 118 stores next month, is open to anyone who mails a postcard to co-sponsor Nabisco.
To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com (c) 1999, The Roanoke Times, Va. Distributed by Knight Ridder/Tribune Business News.
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