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Kroger widens tax bonus program

By DAN SEWELL, AP Business Writer

CINCINNATI, May 5, 2008 (AP): The Kroger Co. is casting its net wider in the battle among retailers to lure extra dollars from shoppers during the U.S. economic stimulus effort.

The nation's largest traditional grocery chain was one of the first retailers to announce plans to give shoppers a bonus—10 percent in its case—if they exchanged tax stimulus checks for store gift cards for matching amounts. Grocery competitors and other retailers are making similar offers.

A Kroger spokeswoman said Monday that the bonus is open to everyone, even if they haven't received a rebate yet and even if they don't qualify for one.

``We tied it to the economic stimulus, but it was just a good time to launch because we knew consumers would have a little extra money and we can help them stretch their grocery dollars,'' Kroger spokeswoman Johnna Reeder said Monday.

The chain had in-store promotions for the gift cards over the weekend.

``This is for all our customers,'' Reeder said. ``Those individuals that maybe weren't eligible (for the stimulus payments) can still take advantage of some great savings.''

Customers must have a Kroger loyalty card and at least $300 to get a bonus amount. Kroger offers the gift cards in $300 increments, such as a $330 card for $300, up to $1,320 in gift cards for a $1,200 payment.

The tax checks and payments are part of a $168 billion plan passed by Congress to boost the slumping economy. Taxpayers who have filed their returns can receive up to $600 and families get up to $1,200, plus $300 per child. Direct deposit payments began last week and paper checks go out this week.

The rebates are expected to reach 130 million households, but payments start phasing out for higher-income households and will be garnished for those who owe back taxes and certain other debts.

Kroger, on April 16, was an early promoter of stimulus-plan store incentives; another was Sears Holdings Corp., which is offering a 10 percent bonus to anyone converting the money into a Sears or Kmart gift card.

Surveys have indicated that many consumers plan to use their payments to pay down debts or to offset the higher costs of everyday needs, and several grocery chains have rolled out incentives to use stimulus payments in their stores.

Haley Meyer, a spokeswoman for Minneapolis-based Supervalu Inc., said that while its program, announced April 28, asks for proof of a stimulus payment, it will be flexible in giving grocery customers a 10 percent bonus on gift cards.

``We'll definitely work with them,'' she said.

Kroger and Supervalu said early customer response has been strong, although no numbers were available.

A Banc of America Securities analyst, Scott A. Mushkin, said in a client note last month that the gift card program could add 1 percent to 3 percent to Kroger's same-store sales in the second quarter.

Kroger operates 2,486 supermarkets and multi-department stores in 31 states under two dozen local banners including Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC, and City Market.

On the Net: www.kroger.com,   www.supervalu.com





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