As consumers’ inflationary concerns affect their spending choices, grocers are presenting offers targeted at easing these anxieties in an effort to deepen customer relationships and drive frequency.
Kroger, for its part, is using worries about rising gas prices to incentivize adoption of its new membership program. The Kroger Co. announced Wednesday (July 13) that it is launching its Boost program nationwide, which, for a set monthly or annual fee, offers free delivery, fuel discounts and exclusive deals on the grocer’s private-label products.
“As customers continue to evolve how they shop and eat, this expansion of our loyalty program offers more personalized value in groceries and fuel, alongside easier access to convenient shopping solutions, such as Delivery,” said Yael Cosset, Kroger’s senior vice president and chief information officer, in a statement. “We are committed to consistently delivering a best-in-class seamless experience with zero compromise…”
Cosset added the brand recognizes that doing so is “especially important” to customers in the face of “an inflationary environment and rising fuel prices.”
The Consumer Price Index for All Urban Consumers (CPI-U), reported by the U.S. Bureau of Labor Statistics (BLS) Wednesday revealed that food prices rose 10.4% year over year in June, and food at home (i.e., grocery) prices increased 12.2%. Meanwhile, gasoline prices soared 59.9%.
Kroger’s announcement is no surprise. In mid-June, Rodney McMullen, the company’s CEO and chairman, told analysts on a call discussing the grocer’s first quarter 2022 results that Kroger would roll the program out nationwide “in the next few weeks” after being “encouraged” by the results in the four pilot markets.
Read more: Grocery Shoppers Engage More With Brands That Offer Fuel Rewards
Across the grocery industry, top players are leveraging membership models to boost loyalty, offering savings to their cost-concerned customers. Amazon’s Prime membership offers access to Amazon Fresh and to exclusive perks at Whole Foods Market stores. Walmart+ offers free grocery delivery. Albertsons Companies offers a FreshPass subscription with free delivery, gas savings, and other perks and benefits.
Membership programs can certainly drive spending. PYMNTS’ April study, “The Benefits of Membership,” which drew from a survey of more than 2,100 U.S. consumers, found that 60% of Walmart+ subscribers had made a Walmart purchase in the previous month, while only 16% of nonmembers had done the same. Similarly, 61% of Amazon Prime members had made an Amazon purchase in that period, while only 10% of nonmembers had done so.
Price is top of mind for grocers’ members and subscribers. According to data from the May edition of PYMNTS’ “Subscription Commerce Conversion Index,” created in collaboration with subscription eCommerce platform sticky.io, 71% of consumers noticed that inflation had impacted their grocery costs. Consequently, 56% of consumers said they would be interested in a grocery subscription if product prices were lower.
See more: Inflation Prompts 10x Increase in Consumers Reevaluating Subscription Value