Fifth Third Bank is expanding the reach of its Kroger Co. supermarket MasterCard program from four states to 10.

The two Cincinnati-based companies have branches and stores in the same states.

Fifth Third was one of the first to issue a cobranded supermarket card, a product designed to develop consumer loyalty.

"Any retailer can break their customers into categories of 'shop most' and 'second shop most,' " said Lawrence M. Turner, vice president and treasurer of Kroger, one of the country's largest supermarket chains. "We want to tie up the 'shop most' customers and maybe sway the secondary shoppers based on the value of the card."

David Robertson, president of the Nilson Report, Oxnard, Calif., said that supermarket cards "are going to be a growth industry."

In the Midwest and parts of the South, he said, Kroger's brand name value "means as much as Exxon does in other parts of the country."

Mr. Robertson also said that Fifth Third Bank has jumped from 59th place to 50th place for bank card issuers since 1995. It reported $350 million in card outstandings and had 500,000 accounts at March 31.

The Kroger card, first introduced in 1993, has no annual fee. It offers up to a 1% rebate at Kroger supermarkets for yearly purchases of $2,500 or more, and a 2% rebate for purchases above $2,500.

Cardholders get a 1% rebate for purchases made anywhere else. Rebate coupons are sent in the mail, and Kroger discount coupons are sent with statements each month.

The annual percentage rate on the card is 11.15% for the gold card, and prime plus 8.9% for the standard.

When the card was first introduced, it offered rebates only for purchases made at Kroger stores. But the bank changed the structure in September, adding the expanded rebate features and the balance transfer option, in an effort to enhance the card's competitiveness and to encourage "nongrocery purchases and to build outstandings," a bank spokeswoman said.

Paul Novak, vice president for credit card product management for the Fifth Third Bancorp subsidiary, called the card a good value for consumers. "They receive a rebate on an everyday product, versus waiting years for an airline ticket or an automobile," he said.

The cobranded card is now being marketed through direct mailings and advertising campaigns at Kroger stores in Indiana, Illinois, Michigan, Missouri, Mississippi, and Arkansas. It was first available in Texas, and has since been introduced in Tennessee, Kentucky, and Ohio.

Mr. Novak said the bank hopes to add 50,000 Kroger cardholders to its base of 150,000 by yearend.

Anne Morgan Moore, president of Synergistics Research Corp. , Atlanta, said that Kroger, which saw $23.9 billion in sales last year, may be trying to get customers to do "80% to 90% of their shopping at Kroger," rather than at three to four different stores.

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