AB Chains Go 'Card Free'

In a surprising strategic move, AB Acquisition broke from the supermarket norm last month by eliminating the loyalty card programs at its chains.The initiative was first unveiled at Albertsons on June 19, and presented as a way to make it easier for all shoppers to benefit from sales and promotions. (The merging Albertsons chains would have needed to align their distinct programs somewhere down the line. See "Albertsons Gets ..." in Related Articles.) AB Acquisition consists of two operating divisions: Albertsons LLC oversees the reunited Albertsons stores, while the oddly named New Albertsons Inc. operates Acme Markets, Jewel-Osco, Shaw’s/Star Markets and all of the company's pharmacy activity.Announcements were made at AB's Jewel-Osco, Acme and Shaws/Star Market chains soon after. Jewel-Osco's June 26 circular touted "Card Free Savings" while promoting a sweepstakes awarding one $100 gift card at each of its 176 stores. Shoppers entered by dropping their Preferred Cards into dump bins from June 26 through July 2. The circular employed a QR code to link to a YouTube video explaining the change. (See video below.) Jewel-Osco also discontinued its Fuel Rewards program, which had operated through the card.Albertsons, on the other hand, will continue its fuel rewards program, and also will let shoppers continue using their cards to participate in the third-party Upromise college savings (see "'SmartSource' Takes ...") and SavingStar digital coupon (see Related Promotional Activity) programs. At Acme, a home page leaderboard ad linked to a video of president Jim Perkins explaining the change as a way to simplify shopping. (See video below.) A June 21 Facebook update also linked to the video. Text from the ad appeared in the chain’s June 21 circular, which also devoted multiple features to the "Card Free Savings" theme.Finally, Shaw's/Star Market used its June 28 circular and a home-page ad to announce the change. Endcap headers, ceiling banners and checkout signs are among the P-O-P materials being used at all the chains to promote the move.Dropping the loyalty cards is part of a broader effort to revamp the lackluster image of the former Supervalu chains (see "Supervalu Completes …") that begins with a new company-wide tagline: "You're in for something fresh." Marketing collateral has promised such arguably standard shopper benefits as cleaner stores, superior service and every day low prices. Jewel, Shaw's and the other chains began plugging store-wide price reductions — as "Something More for Less" — on thousands of SKUs in tandem with the card elimination.Adopting an EDLP strategy might be a good move for chains that in recent years have been hammered by their reliance on heavy promotion to boost sales, a strategy Supervalu unsuccessfully tried to move away from in recent years. (See "Supervalu Chains Provide ...") But eliminating the card programs — and the resulting wealth of shopper information they can provide — seems short-sighted at a time when most retailers are fine-tuning their targeted marketing capabilities through deeper card-data analysis. An AB Acquisition spokesperson told Supermarket News that the plan is to build marketing and merchandising excellence at the store/neighborhood level rather than drilling down to shopper-specific communication.

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