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Grocery stores compete for customer loyalty with gas discounts

December 20, 2012

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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.”

Comments

chocolateplease 1 year, 12 months ago

The HyVee program makes me want to stop shopping there. You must buy from a preferred list of foods that changes weekly, so you have to pay attention to that. It's not clear how the discount even works. The items usually exclude the block-buster sale items that you might be stocking up on, whereas everything you buy from Dillons counts. And the qualifying HyVee items are usually processed foods. Yuck! Reward the buying of junk food! Get fat, or fatter!

And besides, the new HyVee gas station doesn't even sell ethanol-free gas. Stuck with the ethanol version, I won't buy gas there.

kef104 1 year, 12 months ago

Not completely true, their premium is ethanol free. None of Dillons is ethanol free. Their premium is 5% ethanol. In Kansas, gas stations are NOT required to tell you if and how much ethanol is in the gas. Don't you just love how this state cares so much about us little folks.

Ohboyherewego 1 year, 12 months ago

At least HyVee is good to their employees. shrugs

Bob Forer 1 year, 12 months ago

Good idea. Let's say you buy 400 dollars worth of gift cards. Assuming cash back of around 1.5 per cent, you save 6 bucks. The 400 gift card purchase will give you 1600 fuel points, which will save you around $32.00 if you fill up your tank.

So far, you save 38 dollars. Then, there is nothing to keep you from buying sale priced food items with your gift cards, and Dillons has quite a selection of sale items. Lets assume a markdown of 25 percent. That's a savings of $100.00.

So if you do it right, you can save almost $150, around 38 per cent. Of course, this would only apply to families who spend at least $400 per month in groceries--and with the price of groceries, it doesn't take much to rack up $400 in one month.

Katara 1 year, 12 months ago

Some of those gift cards have activation fees so you do have to be careful about which ones you are purchasing. I think it is mainly the cards that are prepaid Visa or Mastercard that have the activation fees.

Cant_have_it_both_ways 1 year, 12 months ago

The reason they can give you these discounts is they over charge you for your food items, or your grocery bill, then like politicians, give it back to you with a smile telling you that they are helping you.

The cash for the discounts has to come from somewhere. I get really tired of all these rewards cards. Heck... Westlake, Best Buy, Office Depot... I am sure there are more that do the same thing. Overcharge you then try to get you to think that they are doing something to help you, in addition to getting on their mailing lists so they can spam your cell phone or email.

Lawrence Morgan 1 year, 12 months ago

Commie is an extreme insult to many people. Please get rid of this post!

Glenn Reed 1 year, 12 months ago

Sensitivity levels are high today, I think this might've been the first time I've had a post taken down.

Perhaps I should rephrase it in such a way that'll hit you in the feels a bit less hard.

Glenn Reed 1 year, 12 months ago

Posting this again. Apparently I used an offensive word....

This is a private-sector, free-market approach to marketing. If you don't like it, or are just tired of it, then spend your money somewhere else 'person who is opposed to free-market, private-sector ways of doing things'.

Katara 1 year, 12 months ago

You don't have to buy gas immediately after. That is how their old program worked. The Fuel Saver program is different

" Discounts expire 30 days from purchase of each Hy-Vee Fuel SaverTM item. There is a limit of 20 gallons per use and discounts can only be used with one vehicle in a single redemption transaction." http://www.hy-vee.com/resources/fuel-saver-faqs.aspx

Katara 1 year, 12 months ago

It is a new program. The Fuel Saver program just started this month so what you are irritated with is the old program. Lots of people were and that is one of the reasons why they changed it.

I don't really care if you choose to shop there or not but I find it strange that you are griping about something that no longer exists.

jhawkmamax2 1 year, 12 months ago

I don't know how it is in Lawrence, but there is a table in the foyer of the Topeka HyVee with all the point specials on it. They also have point specials on some of their hot deli food that are posted on the food cases. I shop both places for different times and different reasons, but I am really glad that HyVee now has a program that works at the pump instead of having to go inside. And living in a town with a Casey's and being able to use my HyVee points there is a huge bonus.

KiferGhost 1 year, 12 months ago

The whole thing plays into the stupidity of Americans. Just skip the bag of cheese doodles and you'll save the money you think you are saving fighting for a spot at the gas pump when there are three other places just down the street with no lines. If the stores sold you a card to save money that would involve jumping off a cliff I do believe there would be plenty of people to do it.

KU_cynic 1 year, 12 months ago

I'm a formerly happy and loyal Hy-Vee customer who's not happy with the new gas program. Under the old program, we would buy what we wanted -- occasionally quite a lot -- and get proportionate discounts -- again occasionally quite a lot. Under the new program, I have to buy the featured items -- and yes they are typically processed food items -- usually highly processed. Frankly, I don't want to spend the time to plan my shopping basket around Hy-Vee's promotional inventory management needs, in fact I find it insulting.

After Christmas I'm going to do the family shopping at Dillan's for a few weeks to see if I can acquire new habits.

Jean Robart 1 year, 12 months ago

You may acquire new habits, but you'll also spend a lot more money. Dillons is prohibitively expensive on non-food items(and on many food items)

KiferGhost 1 year, 12 months ago

Try shopping at Checkers where you just simply save money on what you buy and then you can buy your gas at the station of your choice and not wait for all the other club members at the pump.

headdoctor 1 year, 12 months ago

The only thing Checkers is good for is their banana prices on Tuesday and Thursday but not really worth driving there just for that.

Sherry Warren 1 year, 12 months ago

Checkers also gives points through the Lawrence GiveBack program, although you have to spend a lot there to rack them up. Checkers is weird, but I like weird.

Katara 1 year, 12 months ago

Hy-Vee donates directly to Lawrence schools. You save your receipts and turn them in to the school. The school gets a percentage of what you spent.

Bob Forer 1 year, 12 months ago

Canned goods, frozen foods, and processed food in general are cheaper at Walmart, because they have huge contracts with the manufacturers. However, there is not much of a savings, if any, on dairy products, meat, and fresh fruit and vegetables. In fact, milk, meat, and fresh fruits and vegetables are typically cheaper, but always of much better quality, at the conventional grocery stores.

Katara 1 year, 12 months ago

It really depends on what you are shopping for and you have to pay attention to prices. I don't shop Walmart and haven't for years but in talking with co-workers that do shop there, I overall spend much less than they do on similar items.

I also plan my shopping trip and plan meals around what is on sale instead of just dumping whatever into my cart so that makes a difference too.

engagedecoy 1 year, 12 months ago

Combine these programs with using coupons and you have some real savings. Don't be stupid, there are tons of ways to save money if you take the time to do it.

seth5792 1 year, 12 months ago

I kind of like Hyvee's program, I went there all last week, didn't buy to mouch out of the norm, but did take advantage of certain things they had specials on. when it was all said and done I hadn't spent anymore than I usually would at Hyvee, and was able to save a total of 83 cents per gallon at the end of the week. With gas at 2.97 a gallon, I got 20 gallons for 2.14 a gallon. Not to bad.

irvan moore 1 year, 12 months ago

great veggies at a good price, good quality meat. locally owned, hard to beat checkers

akt2 1 year, 12 months ago

I like Checkers. Not a lot of fluff, but great produce and good meat. Friendly and helpful employees. Once you figure out the layout of the store it is easy to shop there. Great prices.

Frederic Gutknecht IV 1 year, 12 months ago

They ain't no such thing as a free lunch. You save pennies that you paid. I got 20 cents off per gallon filing my car's tank up today (I figure that I saved a little over $2) but I'm sure I spent it on higher prices on Dapper Dan Dillons's Pomade. I shop there because it's on my way home, has a Cap Fed cash MOchine and sells me dream tickets that never catch nothin'.

Oh, brother...where spend thou...

melott 1 year, 12 months ago

Checkers has high quality fruits, veggies, and meats. It has low prices. Save money by shopping there, possibly supplemented by Aldi's. Buy good quality "top tier gas" for your car at a local Phillips, Conoco, or Quik Trip station. Follow prices on gas buddy. http://www.kansasgasprices.com/Lawrence/index.aspx http://www.toptiergas.com/retailers.html

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