Kroger's Foods Co Chain Bans Visa Credit Cards & More Banners May Join

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Kroger's Foods Co Chain Bans Visa Credit Cards & More Banners May Join

08/02/2018
Foods Co

CINCINNATI The Kroger Co. will no longer accept Visa credit cards as a method of payment at its 21 Foods Co supermarkets and five Foods Co fuel centers in central and northern California as of Aug. 14.

Customers will still be able to use Visa debit cards, as well as cash, checks, SNAP and MasterCard, American Express and Discover credit cards, reported Convenience Store News sister publication Progressive Grocer.

The change will allow Kroger to save on the high costs associated with Visa's interchange rates and network fees and to pass on the savings to customers in the form of regular low prices, the company said.

"Our customers consistently tell us that one of the most important factors in choosing Foods Co as their supermarket of choice is our low prices," said Bryan Kaltenbach, president of the Food 4 Less banner under which Foods Co operates. "At Foods Co, we are committed to saving our customers money. Today's decision will help Foods Co continue to deliver great value to our customers with low prices, fresh products and friendly service."

"At Foods Co, we are committed to saving our customers money. Today's decision will help Foods Co continue to deliver great value to our customers with low prices, fresh products and friendly service."

The affected stores are located in Bakersfield, Fresno, Hanford, Lompoc, Oakland, Pittsburg, Richmond, Sacramento, Salinas, San Francisco, Santa Maria, Soledad and Tulare, Calif.

"We realize this will be a change for some customers, but we believe this change will benefit all our customers by allowing our Foods Co stores to continue to offer the things our customers value most, including our low prices, fresh produce and services more than payment type," Kaltenbach said.

Cincinnati-based Kroger is considering expanding the Visa credit card ban on a wider level if it does not reach a deal with Visa on fees at the Foods Co stores, reported USA Today.

"We are going to continue to work with Visa to get where we think is good for our customers, good for Kroger and works for Visa," Chief Information Officer Chris Hjelm said. If means expanding the credit card ban to other stores, "that's what we will have to do," he added.

Kroger has been in negotiations with Visa and other credit card companies to lower the burden of credit card sales, according to Hjelm.

"Cash, check and debit cards are much lower cost … and we believe we have got to get credit to a much more competitive place than it is today," he noted.

Visa released a statement noting that while it is "disappointed" by Kroger's decision, it "remains committed to working with Kroger to reach a reasonable solution."

Convenience Store News and Progressive Grocer are properties of EnsembleIQ.