Grocery store loyalty programs offer customers digital coupons, fuel discounts and product recall notifications in exchange for membership.
However, a Consumer Reports investigation has found that Kroger, one of the nation’s largest grocery chains, collects and monetizes shopper data on a scale that exceeds typical retail practices.
According to the investigation, retail loyalty programs typically require customers to provide their name, home address, email address and phone number during signup. Store chains then track purchasing patterns to build customer profiles. While this practice is common across the industry, Consumer Reports found that Kroger has developed what it characterizes as a sophisticated data collection and analysis operation.
“Store chains often collect your name, home address, email address, and phone number. Then study what’s in your grocery cart. Many retailers do this, but Kroger, one of the largest grocery chains in the U.S., is doing it in a much bigger, profitable way,” said Derek Kravitz, an investigative reporter with Consumer Reports.
The investigation found that Kroger uses collected data both internally and sells it to third parties for targeted marketing purposes. The company’s precision marketing division generated an estimated $527 million last year. These alternative profit ventures now account for more than 35% of Kroger’s net income, according to Consumer Reports.