Texas company, Kroger in legal fight

March 11, 2010 11:59:39 AM PST
A Dallas area company charges that Kroger Co. is ripping off its technology and methods in the grocery chain's popular gasoline discount rewards program. Irving, Texas-based Excentus Corp. has filed federal suit in Texas against Cincinnati-based Kroger, saying its patents are being violated and seeking an order stopping Kroger and for unspecified damages. Kroger filed its own lawsuit this week, asking a federal court in Cincinnati to declare it has done nothing wrong and to make Excentus pay its legal fees.

Excentus has the "Fuelperks" gas discount system and developed programs with several Kroger rivals, including Minneapolis-based Supervalu Inc. and Pittsburgh-based Giant Eagle.

Kroger says it developed its own ways of linking loyalty card data to its gas pumps. The nation's largest traditional grocer has been expanding its fuel rewards to attract penny-counting shoppers during the Great Recession.

The lawsuits come as Kroger expands it program and follow discussions about a licensing fee for Excentus that go back more than a year. Excentus, meanwhile, reached a January settlement and licensing deal with Safeway Inc., the Pleasanton, Calif.-based grocery chain, and again pushed Kroger to settle.

"We felt like we had more than obliged Kroger's request for more time and recently asked that they re-engage to a long-term licensing agreement," Dickson Perry, CEO of Excentus, said in a statement Wednesday. "But based on the reaction we received from Kroger, they left us no other choice but to seek court action to protect our interests."

"We believe we have the right to reward our customers, and we are pursuing this to confirm that," Kroger spokeswoman Meghan Glynn said Thursday.

A major Fuelperks user is BP, which announced last month it's expanding the pump-discount program at gas stations nationwide. The next day, Kroger said it's trying out with BP rival Shell Oil a link of its shopper rewards to Shell gas pumps in five markets in Ohio, Tennessee and California.

The grocer offers at least 10 cents off a gallon for every $100 in groceries bought, and in most markets now allows shoppers to build up discounts, so that buying $500 in groceries would get 50 cents off per gallon at Kroger stations.

Kroger sells fuel at about a third of its nearly 2,500 grocery stores in 31 states.

Fuel sales accounted for most of Kroger's 7 percent increase in revenue for the fourth quarter results reported Tuesday.


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