Boise-based Albertsons quietly rolled out a new subscription offering it calls FreshPass this month. For $99 a year, customers can get a bundle of services and deals from the Boise-based grocery giant.
The program primarily gives customers unlimited grocery delivery without an additional fee. The company calls this “free delivery,” but customers must pay the yearly membership cost in order to waive the typical delivery fees.
FreshPass also includes smaller benefits like a monthly “perk” at in-store Starbucks cafes, savings on store-brand O Organics products, and elimination of expiration for rewards points.
The company has not formally announced the new program and declined BoiseDev’s request for more information, except to say it would send a news release Monday. Albertsons is the nation’s second-largest pureplay grocery chain behind Kroger.
Joins Amazon, Costco, Walmart
Last fall, we asked company CEO Vivek Sankaran if the grocer was considering such an offering. He emphasized the existing Just for U rewards program that offers benefits to shoppers for free – but said at the time, the company might do more.
“That said, we also are looking at other types of memberships where people might get delivery if they have a membership,” he said last November in foreshadowing the FreshPass program.
The company began testing an unlimited delivery program in a limited number of stores in 2019.
Albertsons Companies is the latest grocery company to launch a membership program. While Amazon Prime popularized the concept by offering fast delivery on products and other programs like video streaming – the idea dates back further in the retail space to Costco, which requires a paid yearly membership just to enter the store.
Amazon’s program counts an estimated 147 million members, most of whom pay $119 per year, generating billions in revenue for the Seattle company.
A year ago, Walmart introduced Walmart+ – a $98 per year deal that also provided delivery, plus an extra five-cent savings on gas and a touchless payment option.
For Albertsons, FreshPass comes along with rebranding and tweaks to its broader, free “do you have a phone number with us” program that provides in-store discounts and gas rewards.
The company will drop the Just for U branding it inherited during its acquisition of Safeway and instead name the program after each store banner. For instance, Albertsons for U or Safeway for U.
The company retooled that program to add a yearly “birthday treat” option as well as one free item each month.
Both programs live inside a newly upgraded mobile app that rolls together delivery ordering, in-store promotions, and the rewards program in one interface.
CEO says engagement drives sales
“We know that when people engage in these areas, they spend a lot more with us,” Sankaran told BoiseDev last fall. “We are going to continue to amplify that. We are all coming at it in different ways to keep us close to us as a customer.”
Both the free and paid membership programs will work inside newly relaunched mobile apps.
FreshPass rolled out across Albertsons-owned store banners, including Carrs, Pavillions, and others.
Customers can choose either the $99 per year option or pay monthly for $12.99. The ‘free’ delivery offer applies to any orders placed online above $30 – and only includes orders that come through the company’s own service.
Third-party delivery through Instacart, Uber, or Door Dash doesn’t count.