Although grocery store chain Safeway has operated its Just for U customer loyalty program for less than a year, its impact on the business has been significant and has gained momentum, according to CEO Steve Burd.
During the company’s fourth quarter 2012 earnings call, Burd said Safeway’s net income jumped 13% in the period due, in large part, to the Just for U customer loyalty program.
Based in Pleasanton, CA, Safeway’s Just for U customer loyalty program offers personalized discounts based on past purchases while it drives market share gains and profits, Burd told analysts. The company also runs Vons, Dominick’s and other chains in the U.S. and western Canada.
For the three months ended Dec. 29, 2012, net income rose 13%, to $244 million.
“We are taking our loyalty program to the individual,” Burd said during the call. “We are looking for the button that causes them to give us more loyalty.”
When contacted by Loyalty 360 about the program, Safeway officials declined comment while referring inquiries to the company’s earnings calls.
Safeway customers can access their Just for U account at the grocer’s website and click on the personalized offers and manufacturers’ coupons they want placed electronically onto their Safeway Club Card. The tailored offers are based on a customer’s historic purchases that Safeway collects through Club Cards.
Safeway can cut prices more efficiently through its “Just for U” personalized pricing by creating special deals on those products that an individual customer buys regularly. Just for U prices are for unlimited quantities and usually last 90 days.
Burd said during the call that Safeway had slashed millions of dollars from its newspaper ads and replaced them with personalized offers delivered digitally as part of its Just for U loyalty program.
Safeway currently has 5.4 million households – which represent about 45% of its sales – registered in the Just for U program, Burd said. Safeway’s loyalty program offers an additional 10% to 20% savings off its Club Card, and it’s driving increased purchases from consumers jumping into the “loyal” category. Bard envisions that figure of 45% rising to 55% by year’s end.
Safeway officials have also seen the program grow via smart phones and tablets.
Safeway operates nearly 1,700 stores in the U.S. and Canada and reported $44.2 billion in annual sales.
“I would attribute most of the market share gains to Just for U, which continues to beat our own expectations,” Bard said.