When Grocery Meets Gas, Customers Swoon

Terry Johnson figured the Uppy’s convenience store chain was on to something good when folks started chatting to each other at the gas pumps.

"Nobody does that, unless you know somebody else," said Johnson, vice president of marketing at the Richmond, Va.-based Uppy’s. "It’s kind of like when you’re in an elevator—you just don’t talk to the other people."

The norms of social interaction among strangers, however, went out the window in recent months as Uppy’s customers found themselves enthralled by a unique loyalty promotion the retailer launched in cooperation with Ukrop’s, a grocery chain also based in Richmond.

Ukrop’s had an existing loyalty card for its customers, the "Ukrop’s Valued Customer (UVC)" card, so it approached Uppy’s for a cooperative promotion called "fuelperks!" where customers could earn points on grocery purchases and then redeem them as discounts on gas purchases at Uppy’s. "They already had them all signed up," Johnson said. "That’s what was so cool about it. (Ukrop’s) increased the value of their loyalty program by offering fuelperks."

Big Discounts
For every $50 in grocery purchases at a Ukrop’s store, a customer receives a 10-cent-per-gallon discount on gas at Uppy’s. If they buy $100 in groceries, they get a 20-cent-per-gallon discount; $150, they get a 30-cent discount, and so on. The points accumulate and they’re unlimited.

"You can get 60, 70, 80 or 90 cents off each gallon," Johnson said. "We actually had a customer who came in and bought 20 gallons of gas, and it cost them 38 cents altogether. That was their total—38 cents."

The masses in the Richmond market caught wind of the promotion and it has gone gangbusters since. "Customers absolutely freaked," Johnson said. "They couldn’t believe it. We find customers at the pump talking to other people all the time. They’ll go over to other customers and say, ‘Hey, I just got $1.50 off on a gallon of gas.’"

Logistically, the program required the installation of hardware and software at most of the 38 Uppy’s-owned stores involved, as well as at some of the 50 dealer-operated sites that participated. It was a nine-month planning process.

Ukrop’s gains from the program because more customers are buying more groceries at its 28 stores—presumably to accumulate points—while Uppy’s gets the added benefit of attracting a more diverse group of customers, specifically, soccer moms. "We’re seeing positive trends," Johnson said. "We’re up in gallons—very, very sizable increases, double-digit increases."

The Ukrop’s and Uppy’s promo could likely become a permanent program if the numbers play out as the two retailers are hoping. "Assuming that we and Ukrop’s see the kind of sales increases that we need to see to pay for the expense of the program, we’re hoping (it’s) indefinite," Johnson said.

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