Kroger announced Wednesday it is launching a membership program, Boost, offering to customers who join double gas points and free deliveries for online orders of $35 or more.
Being introduced in Greater Cincinnati as well as stores throughout Atlanta, Columbus and Indianapolis regions, Boost will expand to other parts of the country next year.
Kroger hopes double gas points will draw legions of customers to become members as gas prices soar nationwide in 2021 to levels not seen in seven years. Customers’ will still max out their savings at $1 off per gallon – but they’ll hit that limit twice as fast.
“It’s the perfect time to launch with double fuel points,” said Stuart Aitken, Kroger’s chief merchant and marketing officer. “If you go to the gas station right now, it’s more than its been in a long time, so it’s a great deal for customers.”
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Kroger sold $9.5 billion worth of gas in 2020, making it the nation’s No. 7 fuel retailer. It operates nearly 1,600 fuel centers.
The program is tiered: for customers that sign up for a $59 annual membership, the grocer will give them the enhanced gas points and free delivery within 24 hours; for $99 per year, members get the gas points and free delivery in as little as 2 hours.
New members to either membership tier receive a one-time welcome kit worth over $100, featuring offers from Home Chef, Murray’s Cheese, Vitacost and Kroger’s store brands, offsetting the first-year cost of membership.
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While launching a membership program appears to pit it against membership-based retailers like Costco, Kroger officials say it’s intended to boost its online business that competes with Amazon.
The nation’s largest supermarket chain is launching the program as it tries to maintain its digital sales momentum. Early this year, Kroger revealed its 2020 online shopping business grew to $10 billion. Kroger has pledged to double that by the end of 2023.
With an eye toward that, Kroger is ramping its home delivery service using its own network of robotic warehouses that fulfill online orders. That effort is through a partnership with United Kingdom’s Ocado online grocery provider.
Bill Bennett, Kroger’s vice president and head of e-commerce, hopes Boost membership will drive digital demand from customers as the store continues to open more robotic fulfillment centers.
“Kroger Boost is an accelerant,” Bennett said. “Through Boost, Kroger remains uniquely positioned … making grocery delivery accessible to every customer through the industry’s most affordable free-delivery membership.”
In addition to Kroger stores, the grocer operates several regional supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano’s, Fry’s, Smith’s, King Soopers, QFC and others. The company has nearly 2,800 stores and employs 465,000 workers.
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