Deal offers for retailers, restaurant buyers

A car pumps gas at the Costco gas station. Clashes between Ukraine and Russia have pushed up gas prices in the United States over the past two weeks.

Michael Ho Y | Lightrocket | Getty Images

Along with fried chicken, biscuits and iced tea, the family meal at Southern fast-food chain Bozangles now includes a free $ 10 gas card.

The price of a dozen glazed donuts was temporarily reduced on Wednesday to cut off drivers as they paid more for gallons of gas at select Crispy Cream stores.

Companies are hanging on to gas-related benefits because Americans feel pain at the pump and some are starting to choose where to budget. Warehouse clubs, including Walmart-owned Sam’s Club and BJ’s Wholesale, have launched special campaigns to emphasize cheap gas as a membership facility. Grocers, including Kroger and Giant Eagle, are documenting fuel programs that turn consumers’ gross costs into lower prices per gallon.

“We are an automobile economy,” said Jackie Woodward, Bozangles’ chief brand and marketing officer. “It’s something that really hits the heart of how people go about their lives, and I think that’s why it resonates with our customers.”

Bojangles last week began handing out $ 1 million in gas gift cards to company-owned restaurants and franchises, many of which have been hit hard by inflation, especially in the southern states.

Woodward said the Charlotte-based company’s customer is usually a blue-collar worker who “cares about the food they feed their families and how to expand their dollars.” He said the fast-food chain has used the opportunity to keep up with customer concerns. So far, he said, customers have responded with surprise and gratitude because they have received more for their money.

Gas prices are one of the daily costs that have pushed inflation to almost 40-year highs. March 11 hit a national average of $ 4,331 a gallon, the highest price on record according to the AAA. As of Tuesday, it was down to an average of $ 4.098, but it is still a significant increase from the $ 2.863 average a year ago. Gas prices are even higher in some northeastern and west coast states. In California, for example, according to the AAA, the average gallon price of gas as of Tuesday was $ 5,748.

Tendai Kapfidze, chief economist at US Bank, says prices posted in big signs across the country drive only a fraction of household spending but could have a big impact on consumer confidence.

“The effect of the mentality is probably bigger than the wallet effect,” he said.

Retail sales effect

Consumers spend about 4% to 6% of their monthly expenses on gas, Cupfidge says. This is more of a burden in low-income households, where the percentage can increase up to 20%.

Retailers will get new clues on how consumers are responding to these prices on Thursday morning, when the Commerce Department will report retail sales from March. Retail sales fell shyly than expected in February, indicating that consumer spending may slow down.

Prior to the release of the March retail data, however, consumer concerns were growing. Over the past two weeks, an uncertain economic context has prompted analysts to downgrade some retailer stocks and upgrade others. The war in Ukraine has injected additional uncertainty about the mentality of consumers. Some economists have warned of the risks of recession, even with low unemployment and job opportunities outweighing the needs of the people.

Companies, such as Messi, have acknowledged that they need to compete for discreet dollars because some consumers decide to buy a new outfit, book a vacation or go to dinner.

Gasoline prices are displayed at a gas station in Manhattan, New York City, on March 7, 2022.

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Steve Saddov, former CEO of Sax and senior adviser to MasterCard, says retailers are at a turning point after an “almost extinguishing period” when consumers have less space to spend their money.

In the run-up to the epidemic, people tend to buy stimulus checks and purchase additional savings. The company had less publicity and more profit due to lower than usual inventory. For example, in the case of Covid, holiday sales hit an all-time record of $ 886.7 billion, despite supply chain snurls and omicron-fueled spikes.

Sadov says consumers stay healthy, but he expects spending to slow down. The high retail sales numbers now reflect the high prices of gas and other products, not just the appetite of buyers to spend, he added.

Sending a message

While the high price of the pump is a burden on consumers, some retailers see the opportunity to occupy a large portion of the family budget.

Since last week, cashiers at Giant Eagle Grocery Stores have been promoting the company’s loyalty program at Checkout. There are 200 privately held grocery supermarkets and 270 convenience stores, including gas stations in Pennsylvania, Ohio, Indiana, Maryland and West Virginia.

The core of the program is the rewards that customers can redeem for dollars from groceries or gas. To push customers to sign up, Grocery is offering a 10 cent discount on every gallon of gas purchased from its pump for the first 90 days, says Justin Weinstein, vice president of customer experience. It also recently waived the award’s expiration date, he said.

“Rising fuel prices was on our heads because we made these changes,” he said.

Weinstein said the giant eagle noticed that gas prices had already changed the nature of the purchase. Customers are leaning towards smaller, more frequent fill-ups.

Some companies are joking about otherwise serious issues. As of this week, Crispy Creme has said it is using its “strategic donut reserve”. Over the next four weeks, the price of a dozen of his shiny donuts on Wednesday matched the national average for one gallon of gas. That’s less than half the normal price of 10.

Dave Skena, chief marketing officer, said the idea was born out of his own team’s complaints about gas prices. He said the concept of a light mind is a very real problem for the family budget. He said the price of gas is unique because the number of billboard sizes is in the face of customers.

“It’s very visible, and it’s not very replaceable, and for many people, it has a significant impact on other things they can afford – especially the ones that can be enjoyed,” Skena said.

Donuts are sold at the Crispy Cream Store on May 05, 2021 in Chicago, Illinois. Donut Chain reported yesterday that it plans to take the company back to the public.

Scott Olson | Getty Images

For membership-based warehouse clubs, branded gas stations – and their low prices – have become a way to attract customers.

Cath McLean, CEO of Sam’s Club, said some members are signing up specifically for cheaper prices at the pump. When they meet, he said, the club is looking for ways to impress them.

“We see gas as a member advantage – so we always want to be super competitive – and then it becomes a traffic driver at the club,” he said.

This month, the Sams Club is offering a 10% back-in-store credit every Tuesday for club members who use one of its signature credit cards at any gas station.

Warehouse Club competitor BJ’s is encouraging shoppers to fill their fridges and tanks at the same time. Customers who spend $ 100 or more at a club this month will receive a 50 cents discount per gallon on the same day of the transaction. If they shop with a BJ Co-branded credit card, they will receive an additional 10 cents off during one month of promotions.

Costco, another warehouse club, saw sales rise in March as gas prices rose. Its comparative sales increased 17.2% in the five weeks ended April 3, compared to the previous year.

Some of these sales profits come from gas prices and customers who shop at the warehouse club after being pulled to the gas pump.

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