Food Town stores have had a card since 1993 offering discounts on selected grocery items, but in the last two weeks Kroger and Farmer Jack joined in, triggering a small price war. Each chain's card is aimed at luring shoppers who they hope will buy nondiscounted items. In addition, it helps the companies determine what items shoppers want, which is valuable for marketing.
The cards can provide substantial savings, such as Kroger's this week of a half-gallon of milk for 77 cents, less than half its normal price.
``What it really allows us to do is reward our best customers and target savings on the things they like best,'' said Nick Ree, a Kroger spokesman. ``The whole thing is about information.''
Such card programs, which are growing, provide chains with information about shopping habits to enable them to target customers for coupons and products. But they also are dicey because of privacy concerns by some customers. Typically, the customer's name, address, phone number, and email address are requested when customers sign up for the card, which cannot be used like a credit card.
``There is some anti-card sentiment,” said Pat Nowak, a spokesman for Food Town, which is owned by Spartan Stores, Inc., of Grand Rapids, Mich.
Still, seven out of 10 large supermarket chains nationwide have such card programs, and view them as a marketing advantage, according to the Food Marketing Institute in Washington.
The card-discounted items are marked on store shelves and in newspaper advertisements. To compete with Food Town's longstanding card, in the last two weeks Kroger and Farmer Jack offered savings cards in Toledo. Farmer Jack has jumped into the local market by its purchase of three former Churchill's stores.
Meanwhile, the area's other large grocery chain, Meijer, Inc., has no such card program. But the Michigan company is advertising that it will match prices in competitors' ads.
Food Town, Farmer Jack, and Kroger officials said they hope their cards in the Toledo area keep customers loyal to their stores.
Besides discounts on foods, the cards offer other benefits. At Food Town, for example, the card is used to rent videos, and it provides discounts at some other businesses and on admission to some local events, such as the area auto show, the annual Parade of Homes, and the German-American Festival.
Farmer Jack, which has offered such savings cards at its Michigan stores for about five years, plans to offer card discounts soon on meats as well as other grocery items. But the card also has a unique benefit: bonus miles for Northwest Airlines, based on the cost of groceries purchased by card users. It has discount tie-ins with other businesses, like Domino's Pizza.
Kroger, which has spent $12 million and three years getting its card program ready for its division that includes Toledo, provides discounts on grocery items and on gasoline where it has gas stations. The company plans other business discounts too, a spokesman said.