Dive Brief:

• Kroger has launched a new membership program that offers two options for no-fee delivery service and doubles the fuel points shoppers gather when they buy groceries, according to a company announcement Wednesday.
• Kroger Boost, part of the grocer’s Kroger Plus loyalty program, offers unlimited no-fee delivery within 24 hours for a $59 annual fee, or in as little as two hours for a $99 fee. Both options require a $35 minimum order amount. The program has rolled out in the Cincinnati; Atlanta; Indianapolis; and Columbus, Ohio divisions, with additional ones set to be added in 2022.
• Kroger is adding a membership program that will serve as an “accelerant” to its expanding online grocery service, one e-commerce executive for the grocer said.

Dive Insight:

Kroger is gradually rolling out a membership service to compete with similar programs from Walmart and Amazon as they all seek a greater share of wallet from shoppers that are increasingly shopping across stores and online.

The program rolls out at a time when Kroger’s online business has ballooned to more than $10 billion, and promises to attract more shoppers to its vertically integrated Kroger Delivery business. That service, fueled by Ocado automated fulfillment centers, is now operating in the Cincinnati area and in Florida, and is set to scale out to more than a dozen markets nationwide.

“Kroger Boost is an accelerant to the Kroger Family of Companies’ rapidly expanding seamless ecosystem, which includes our new Kroger Delivery fulfillment centers,” Bill Bennett, Kroger’s vice president and head of e-commerce, said in a statement.

While other retailers have rolled out membership programs, most have been available at a single price point that’s around $100. Kroger offers a tiered approach, with a $59 option that offers slower delivery speed but may be easier for shoppers to commit to than the $99 choice.

Boost’s fuel offer doubles the number of fuel points members earn for every dollar they spend on groceries. The resulting savings are good for up to $1 off per gallon, according to the announcement.

To draw shoppers into the program, Kroger is offering a “welcome kit” that includes offers from Home Chef, Murray’s Cheese, Vitacost and Kroger’s private label brands, amounting to a more than $100 value that the grocer says offsets the cost of the first year of membership. Customers enrolling in either membership tier will receive the kit.

Retail membership programs often include numerous perks, and experts say that increasing those perks can add value to a program. Walmart+ includes scan-and-go shopping along with no-fee delivery and fuel perks, while Hy-Vee's membership program offers product discounts and access to a special customer service phone line. Asked whether the company plans to add more services to Boost or not, a Kroger spokesperson said, “As the program evolves, we will collect feedback from our members to learn what would be most engaging to them.”

Kroger previously tested a Delivery Savings Pass at stores in Texas and California, which waived fees on orders of $35 or more for a $79 annual fee. The spokesperson didn’t say whether that program is still running, though a scan of Kroger’s website shows it’s now a gift card option for shoppers.

Kroger’s membership announcement comes a day after it unveiled a partnership with Bed Bath & Beyond that will offer a limited assortment of home and baby products on Kroger’s website and in select stores. Last month, the grocer announced it plans to build five additional automated fulfillment centers, bringing its total commitment to 16 facilities, including one that will introduce Kroger Delivery to the Northeast.