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PITTSBURGH -- Giant Eagle Inc. is the target of allegations made by a petroleum retail trade group here that the supermarket chain is using a popular shopper-loyalty rewards program to illegally sell gasoline below cost.
According to local news reports, the Petroleum Retailers and Auto Repair Association of Pittsburgh (PRARA) has requested a meeting with the state attorney general's office, concerning Giant Eagle's highly successful fuelperks! program. Giant Eagle rewards cardholders can receive a 10-cent-per-gallon discount for gas at the chain's GetGo c-store subsidiary for every $50 they spend at the supermarket.
PRARA claims the grocer's gas discounting program violates the state's Unfair Sales Act. Nancy Maricondi, executive director of the 350-member trade group, was quoted as saying Giant Eagle is "killing us. It's unbelievable. Our members only work on a 5-cent margin at best. There's no way they can compete. If you're by a GetGo, you don't have a chance."
Giant Eagle spokesman Rob Borella told Progressive Grocer the chain "does not sell fuel below cost. Our goal is to price fuel competitively within local markets and to make a fair profit." Borella said the fuelperks! program was "designed to reward customers for their loyalty in meeting the appropriate purchase requirements in participating Giant Eagle supermarkets. Giant Eagle's fuelperks! program complies with all applicable laws."
In response to a remark from a competing fuel retailer who told a local newspaper that Giant Eagle hikes grocery prices to fund its fuel discount program, Borella said, "The reality is that Giant Eagle reduced everyday prices on approximately 3,000 items last November, resulting in added annual savings to customers of approximately $35 million."
"With the rising costs of fuel, thousands of customers continue to tell us every day how much they appreciate the fuelperks! program as yet another way to save by shopping at Giant Eagle," Borella said.
The 219-store chain launched its grocery/gas concept in July 2002. Today, the company operates 63 total GetGo locations in Pennsylvania and Ohio -- 42 of which are adjacent to supermarkets while 21 are stand-alone units. The GetGo brand is owned by Crossroads Convenience LLC, a joint venture of Giant Eagle and Guttman Enterprises, a subsidiary of Belle Vernon, Pa.-based Guttman Oil Co.
-- Meg Major