Loyalty One

The Kroger Co. will open gas station No. 1,000 on Wednesday, a milestone that underscores the growing link between groceries and gas in the drive to build customer loyalty. 

The nation's largest traditional grocery chain has nearly doubled its number of gas stations in the past five years, after having just over 100 a decade ago. Kroger is also rapidly expanding a customer rewards tie-in with Shell Oil. In less than a year since their joint pilot launch in five markets, that program has grown to nearly 5,000 Shell stations in 26 states.

Other grocery chains have also expanded fuel rewards in an industry that has seen sharpened competition, marked by price-cutting and promotions, in the rough economy.

Bryan Pearson, president of the loyalty marketing firm LoyaltyOne Inc., said fuel rewards are particularly popular because while few consumers like gassing up, they enjoy watching the pump prices fall before their eyes. At many Kroger stations, they can drop down by as much as $1 a gallon — 10 cents a gallon for every $100 spent on groceries.