When you think of gasoline price wars, you think about gas stations across the street from each other dueling for customers. But grocery store gas wars?
That's what's going on in Lawrence these days, where Dillon’s and Hy-Vee are promoting their competing gasoline discount programs and in an effort to build customer loyalty to their grocery business. The winners of the war are customers, who can save money on every gallon of gas purchased at the chains' affiliated gas stations, if they play their gas cards right.
Dillon's has had a Plus gasoline card, which offers loyal customers points that can be exchanged for gas-price discounts, for years. But the competition heated up earlier this month when Hy-Vee introduced its own gas discount program.
Game on: Dillon's is now offering double points for every dollar a customer spends through March, and quadruple if they buy a gift card in the store, with 10 cents a gallon off for every 100 points a customer earns. Hy-Vee is offering extra discounts based on purchases of certain products. For example, purchasing 10 Hy-Vee Greek yogurts will save the buyer 10 cents a gallon until Dec. 25. In addition, Hy-Vee has had daily specials, such as an additional 12 cents off to celebrate 12-12-12 on Dec. 12.
Customers seem delighted by the supermarket gas war. “It’s a really neat idea,” said Hy-Vee customer Rachel Green of Lawrence, a college student with a 6-month-old daughter and working husband. “We’re pretty tight on money with a little one, so any few pennies that we can save definitely helps.”
Wyatt Hundley, of Lawrence, is a loyal Dillon’s customer who frequently uses his Plus card. “I average probably 40 to 50 cents a gallon every time I fill up,” he said.
Pat Protasio, of Baldwin City, said she has used Price Chopper's Fuel Rewards program and recently signed up for the Hy-Vee card as well. “I was slightly disappointed because I don’t always buy the stuff that is needed to get the points,” Protasio said.
There are restrictions on the benefits, of course. Dillon's allows a maximum savings of $2 per gallon, but that perk drops to a $1 limit on Jan. 1. And the points expire at the end of each month. Dillon's program is valid at stores in Kansas and at participating Kroger stores elsewhere, and the gas discounts are good at Dillon's, Kwik Shop and Kroger gas stations. Hy-Vee's gas discounts, which expire after 30 days, can be used at participating Hy-Vee, Shell and Casey's gas stations.
“Fuel has become a huge portion of customers' expenses,” Andrew Yochum, manager of the Hy-Vee store at Clinton Parkway and Kasold in Lawrence, said. “A lot of people drive long distances for work, for school and for all sorts of things. It’s really a loyalty program for shopping with us for groceries.”
At Dillon's, spokeswoman Sheila Lourie said, "By providing these fuel rewards to our customers, we know that they appreciate those savings on gas, so we look for that experience to give them another reason to shop at Dillon's."
Everybody wins with these types of programs, said Jeff Lenard, spokesman for National Association of Convenience Stores.
“The customer gets a discount,” Lenard said. “The gas retailer gets customer traffic. The gas brand gets more value for the brand in enticing other retailers to enter branding agreements, and the grocery store gets more traffic by linking shopping there to gas price sensitivity.”