Supermarket Cards: The Pricing Issues

Some interesting background data on supermarket membership cards.

In the eyes of many consumers the pricing issues surrounding supermarket “loyalty” card programs can be summed up in one simple concept: those who don’t have a card pay more at the register. The stores portray it in a similar manner, but call it “rewarding loyal customers” with lower prices. But few things in life are truly simple, and supermarket cards are no different.

Pricing issues with card schemes fall into two categories: savings and segmentation. While the savings issue has the greatest impact on consumers today. segmentation will have implications for years to come.

The recent proliferation of card programs throughout the country makes it clear that participating stores think they are a wonderful marketing tool. But when consumers take off the rose-colored glasses that the supermarket hands out along with their cards, they find that the programs do little good for anyone but the stores themselves.

Merger-mania among Southern California area supermarkets has been in high-gear for the past several years. For years I always went to the Hughes market on Glendale Bl. or San Fernando Rd., but when Ralphs bought up the Hughes chain, Ralphs brought in inferior produce and baked goods and dedicated more aisle space to high-profit junk food.

Of course I voted with my wallet and went elsewhere, but the area markets are mostly dominated by the Axis Of Evil: Ralphs, Vons, and Albertsons. At least the Southern California Albertsons don’t have the friggin’ card.

[via Red Rock Eater]

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