Banking

Citi renews card-issuing pact with booming farm-supply chain

Citi Retail Services has renewed its longtime card-issuing relationship with Tennessee-based Tractor Supply Co., which saw record sales during the pandemic as consumers expanded their backyard menageries.

Citigroup, which began issuing Tractor Supply’s private-label card in 2000, has finalized a multi-year deal to continue issuing consumer and business versions of the card with plans to expand various digital features, Citi said in a Monday press release.

As part of the agreement, Citi will work closely with Tractor Supply to expand the card portfolio in part through the card’s tight connection to the chain’s Neighbors Club loyalty program, which customers are encouraged to join when they apply for a card, according to a Citi spokesperson.

Tractor Supply, which has 1,900 stores and has been opening about 80 new outlets a year, has 20 million members in its loyalty program, who account for more than 60% of Tractor Supply’s sales, the chain’s CEO Hal Lawton told analysts in April when announcing first-quarter earnings.

The program’s rewards increase with spending, and at the highest tier include free same-day and next-day shipping. About a third of new customers join the retailer’s loyalty program immediately and another 30% join shortly after making their first regular purchases of supplies, Lawton said.

Responding to a surge in e-commerce sales during the pandemic from consumers who increased their spending on pets and poultry, Tractor Supply added technology to support curbside pickup at its stores.

Tractor Supply’s net sales during the first quarter of 2021 rose 42%, with e-commerce sales increasing by triple digits for the fourth consecutive quarter, the company said.

Millennials’ domestic animals were a major driver of Tractor Supply’s recent sales boom. One in four of the chain’s customers recently adopted a pet, according to its research, and Tractor Supply is the leading provider of supplies for people who keep chickens in their backyards, according to Lawton.

Tractor Supply sold 11 million live young chickens last year and half of those were for new backyard coops, Lawton said.

“Millennial customers are coming in and buying pet food or chicken feed to fuel those passions and habits,” he said.

Tractor Supply earlier this year acquired the 167-store Orscheln Farm and Home chain based in Moberly, Missouri. Orscheln has worked with both Synchrony and UMB Bank to issue private-label credit cards.



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