H-E-B Launches Credit Card to Drive Private Label Sales

As grocers compete for shopper loyalty amid inflation, H-E-B has launched its own credit card.

The supermarket chain, which has more than 430 locations in Texas and Mexico and its Central Market subsidiary, announced Monday (April 17) the launch of its H-E-B Visa Signature Credit Card and Central Market Visa Signature Credit Card. Both offer 5% cash back on the grocer’s private-label products and 1.5% on other purchases at its stores.

“At H-E-B, we’re always looking to create and adopt innovative, quality programs that give Texans more ways to save,” H-E-B group vice president of marketing Ashwin Nathan said in a statement. “With the H-E-B and Central Market credit cards, we’re offering Texans a more rewarding shopping experience that provides savings wherever they shop and gives H-E-B and Central Market fans a premium benefit on their favorite products.”

The move comes as rising food prices compromise shoppers’ loyalty. Research from the March edition of PYMNTS’ Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which draws from a survey of more than 2,100 United States consumers, revealed that only 17% of grocery shoppers consider themselves loyalty to their go-to merchants, while 44% are deal chasers, willing to go wherever they will get the best price. The remaining 39% are persuadable shoppers, who look to strike a balance between brand loyalty and pursuing better deals.

Additionally, offering credit cards can be an effective way for grocers to woo high earners. A recent PYMNTS study of more than 2,400 U.S. consumers who have purchased groceries at least once in the past month reveals that about one in three consumers paid for their most recent grocery purchase via credit card, and that share has held relatively constant over the last year.

Financially stable consumers, however, are significantly more likely pay for their grocery purchases with credit cards, such that the payment method can be an effective way for supermarkets to reach consumers who have money to spare. The study found that, among consumers who do not live paycheck to paycheck, credit cards are the most popular payment method at the supermarket, with nearly half (47%) of these shoppers having used it to make their most recent grocery purchase.

Indeed, H-E-B is far from the only grocer to offer a credit card in an effort to win the loyalty of these consumers. Kroger, the nation’s leading pure-play grocer, for its part, has its Kroger Rewards World Elite Mastercard, offering cash back on Kroger purchases and fuel savings. Walmart, the world’s largest grocer, has its Capital One Walmart Rewards Card, offering 5% cash back on digital purchases from the mega retailer and 2% on in-store and fuel station purchases. Plus, leading grocery aggregator Instacart launched a credit card last year.

In this environment, grocers that are looking for new ways to drive loyalty are ahead of the curve. In fact, research from PYMNTS’ study “Retail Payments Innovation Year in Review: How Real-Time Payments Drive the in-Store Customer Journey,” created in collaboration with ACI Worldwide, which drew from a survey of 300 U.S. and U.K. retailers, revealed that only 32% of grocers are innovating their loyalty programs.