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Groceries that feed your car
Hoping to pump up sales, stores are offering discounts on gas to their regular customers
By Anna Sowa / The Bulletin
Published: October 01. 2008 4:00AM PSTIn the face of uncertain economic times, grocery stores that operate fuel stations want to make one thing certain: They can help you save money on gasoline.
Regional gas prices fluctuate based on a number of variables, including whether the fuel station is independent or owned by a corporation. Independent gas stations have thin profit margins, thanks to credit-card fees, labor costs and purchases from their distributors.
Grocery stores, however, use fuel stations to run more traffic through their stores. That way, they can make up any losses on cheaper gas through the increase in shoppers and incentives for shoppers to buy more. They offer discounts through their membership cards, which keep track of your personal information and are used for additional in-store discounts.
Central Oregon has two grocery-owned fuel stations: Safeway in Madras and Fred Meyer in south Bend.
Safeway had hoped to build another fuel station at Bend’s Century Drive store, but those plans have been tabled, representatives say.
With fuel prices more than $1 higher than this time last year, grocery fuel stations are hoping to gain customer loyalty.
On July 1, Safeway upgraded its fuel-discount program, known as the PowerPump Rewards Program. The Madras station still takes 3 cents off per gallon when you use your Safeway Club Card, but now, you can take even more money off when you buy certain items.
Customers receive 10-cent discounts per gallon for every $100 they spend on certain products at a Safeway store within the calendar quarter. After that three-month time, the discounts expire, and you must save them up again.
The store has expanded the items that give you discounts, including pharmacy prescriptions or transfers and gift cards, said Safeway Public Affairs Director Dan Floyd.
For example: If you spend $400 on select merchandise in three months using your club card, you’ve gained four 10-cent discounts, or 40 cents off per gallon at any Safeway fuel station (27 exist in Oregon).
“We’re rewarding loyal shoppers,” Floyd says. “There’s nothing really for you to keep track of except to use your Club Card.”
Items that do not count toward your discount include alcohol and tobacco products, Floyd says. Otherwise, he says he would assume that most products shoppers buy will count toward the program.
Additionally, any prescription you have filled at the Safeway pharmacy, no matter the cost, will earn you a 10-cent discount, Floyd said.
This bonus is especially attractive to Safeway’s senior shoppers, he said, and helps the company remain competitive with other pharmacy retailers.
Your discounts are typically printed at the bottom of your grocery receipt.
The old system offered the 10- cent discount for every $50 spent in one visit. Those 10-cent discounts were not cumulative and fewer Safeway products counted toward your discount.
Even if you don’t live in a city with a Safeway fuel station, the new program makes it easier to use your fuel discounts, Floyd says. Now that people can save up their gas discounts per quarter, they have a chance to take advantage of the discounts as they travel through Madras’ station on their way out of town.
If you are using the fuel station but don’t want to use your 10-cent discount, tell the attendant and they will give you the normal 3-cent discount per gallon, Floyd says.
Those who know how to work Safeway’s new system will find big benefits: If you want to spend $2,000 on a TV at Sears, you can buy a Sears gift card at Safeway and get $2 off per gallon of Safeway gas.
“That is the great thing about PowerPump,” Floyd said of the program. “It essentially tells the customer how to work the system.”
Floyd said the fuel discount will work for up to 25 gallons bought at a time. If your discount is enough to be worth more than a gallon of gas (if you accumulate $4 off per gallon and gas is only $3.80, for example), then your tank of gas will be free and you will not receive any money back.
Safeway is betting that a free tank of gas sounds pretty good to consumers’ ears right now.
“It was a response to the economy and to fuel prices,” Floyd said of the new system. “Our economy is struggling, and we want to have the most competitive and most inviting program out there for the consumer.”
Safeway’s main rival in Central Oregon lives in the region’s largest city.
Fred Meyer built its fuel station on Bend’s South U.S. Highway 97 in 2007. Like Safeway, Fred Meyer offers the 3-cent-per-gallon discount just for using your Fred Meyer Rewards card.
Fred Meyer Rewards are based on a points system, and every dollar you spend earns you one point, says Fred Meyer spokeswoman Melinda Merrill.
If you use your Rewards card and spend $100 within 30 days in the store, you get 10 cents off per gallon of Fred Meyer fuel (15 fuel stations exist in Oregon).
Unlike Safeway, Fred Meyer’s 10-cent discounts are not cumulative. Instead, earning multiple 10-cent discounts gets you cheaper Fred Meyer gasoline on your next few visits, in 10-cent increments.
But Fred Meyer offers one other incentive to use its membership system: Fred Meyer MasterCard Rewards. In addition to getting extra points on MasterCard purchases anywhere, you also get 15 cents off per gallon if you use the credit card to spend $100 within 30 days at Fred Meyer.
On Monday morning, AAA reported that fuel prices in the Bend area averaged $3.61 per gallon, down 5 cents from last month but up 70 cents from last year.
Even if gas prices drop lower, the grocery stores likely will keep their fuel discount programs, betting that fuel prices will always hit consumers’ wallets.
“This is the new program, not just something we’re doing for the time being,” Safeway’s Floyd said. “It’s a permanent deal.”
Anna Sowa can be reached at 541-383-0304 or asowa@bendbulletin.com.
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