It's not about the fuel.
fuel.
Therefore if you spend £50 and have an empty Hummer, they've discounted £5 from your food bill.
They already make *huge* profits (in the billions IIRC), but by your spending £50 at their store, they've made £5 less profit, but more importantly, you've spent in their store, and not anyone elses, which means their headline figure goes up, and someone elses goes down.
Pipeline Fuel Cards 426On Sun, 30 Jul 2006 21:10:14 +0100, SteveH was popularly supposed to have said: The idea, I think, is to get...
loss is less.
It's just something to get people in the door, with a sweetener that means nothing (IMO) about fuel.
If they can get a stranger in, they may be able to get them in as a long time customer. My Father in Law used to be an avid ASDA fan. He tried Tesco (not due to the fuel discount, but it could have been in principle), and he's found they stock a larger range of better quality stuff than his local ASDA, and he's now spending more in Tesco and less in ASDA.
If they can get *one* person to switch from A.N.Other supermarket to Tesco, at £50 a week, that "pays" for 50k litres worth of discount, let's say 1000 other punters who only went along for the discounted fuel.
I'd have thought that 1 in a thousand conversion would be quite poor.
I think this is how Tesco see it, except with more "Synergies" and "ROI"s.
Pete.
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