Kroger sees customers' favorite charities as the key to loyalty  

    The nation’s charities are getting a powerful new ally: millions of loyal Kroger shoppers.

    In a new twist on giving, the nation’s largest supermarket chain also aims to bag more customers and bigger sales receipts. It’s rolling out a nationwide program that lets loyalty card holders select charities to which Kroger will donate, based on dollars they spend in stores.

    Strategy, not sentiment, is driving the move. The desire to easily contribute to a favorite good cause is becoming an increasingly important motivator of human behavior, the experts say.

    “Our objective is to find ways to make our shoppers even more loyal,” said Lynn Marmer, Kroger’s group vice president for corporate affairs.

    By the end of next year, most Kroger divisions will contribute to a combined $50 million that will be given to schools and other nonprofits based on local shoppers’ charitable preferences and their shopping habits. Kroger’s Community Rewards program will account for one-fifth of the grocer’s total $250 million-a-year charitable activity.

    Cincinnati-based Kroger has donated millions to charitable causes for years. But analysts believe that tying the grocer’s local giving to shoppers’ purchases could prove to be a sales bonanza if it motivates target customers. The expectation is they will spend more of their grocery budget at Kroger, knowing they’re racking up points that will help their favorite cause – whether it’s the United Way, an animal shelter or their kids’ band practice.

    Kroger didn’t invent the idea – Pleasanton, Calif.-based Safeway Inc. has offered a similar option on its loyalty card program for years, with proceeds all benefiting education.

    But Kroger’s bid to roll the program out nationally, and focused on local charities of all kinds, is expected to shape the industry.

    “The top 20 percent of your customers provide 80 percent of your profit. If you shift the right customers that’s huge,” said Mark Johnson, chief executive of Loyalty360, a Cincinnati-based loyalty program trade group.

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