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The Kroger Co. is combining charity and customer loyalty by rolling out a new nationwide rewards program that allows Kroger loyalty card holders to choose which charities the retailer donates to, based on the amount they spend in its stores.
The Kroger Community Rewards program is expected to donate $50 million to various schools and nonprofit organizations by the end of next year, according to a Cincinnati.com report.
Kroger’s total charitable activity reaches $250 million annually. This new program is intended to benefit nonprofits, customers and Kroger alike, as program participants are likely to spend more of their grocery budget at Kroger, knowing this will directly help their chosen charity.
"Our objective is to find ways to make our shoppers even more loyal," said Lynn Marmer, group VP for corporate affairs.
Community Rewards allows loyalty card holders to sign up online and select a preferred charity from the list of local nonprofit organizations that Kroger has agreed to support. Each participating customer’s purchases are then tracked (excluding alcohol, tobacco and gasoline), and each dollar spent counts as a vote for their chosen charity. At the end of every quarter, Kroger counts the total dollars spent by participating program members and distributes its donation money proportionately.
Customers' earned loyalty program discounts and gas points are not affected by their participation in Community Rewards, as the charitable component is a separate feature, the report noted. Previously, customers could use reloadable gift cards to influence Kroger's contributions to their preferred organizations.
"What's great is it's so much easier," Marmer said. "The beauty of it is there's no work on the part of the consumer."
To date, the company has rolled out Community Rewards to roughly half of its operating divisions. The program will expand throughout the West, Pacific Northwest and Southeast in 2014.
Kroger, Progressive Grocer's 2013 Retailer of the Year, operates 2,414 supermarkets and multidepartment stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's.