Grocers change strategy to lure cost-conscious shoppers
By Joyzelle Davis 
| July 13, 2009 | 9:01 AM
Safeway grocery stores throughout Colorado have started doubling manufacturer coupons in an attempt to lure penny-pinching consumers, who are increasingly using the bargain slips found in their newspapers and mailboxes and at online sites such as CouponCabin.com and CouponMom.com.
“Customers are really paying attention to coupons and are shopping our circular ads” to find the best bargains, Safeway spokeswoman Kris Staaf said.
This is the first time in recent years that Safeway stores in the Rocky Mountain region have doubled manufacturer coupons, she said. Safeway, which has 121 stores in Colorado, will double manufacturer coupons up to 50 cents, for a total of $1 off each item.
King Soopers has doubled store coupons up to $1 in savings for the past 10 years at Colorado stores, a spokeswoman said. Both King Soopers and Safeway require customers to have loyalty cards to receive double-coupon savings.
Marking the first significant jump in usage since the early 1990s, coupon redemption in the fourth quarter of 2008 grew nearly 10 percent compared with the same period a year earlier, according to Inmar, a promotions logistics provider. The demand was driven by a 6.6 percent surge in food prices – the largest annual spike in nearly 30 years — as higher gas prices pushed up costs. While gas prices have since plummeted along with the economic outlook, food prices haven’t followed suit.
That’s prompted many people to buy food from supermarkets instead of at restaurants, with 85 percent of consumers saying they eat a home-cooked meal at least three times a week, up from 75 percent in 2006, according to the U.S. Food Marketing Institute, which represents grocery stores.
The double-coupon program gives King Soopers and Safeway an edge against rivals Target and Wal-Mart, which don’t double manufacturer coupons. Wal-Mart in particular has lured new consumers during the recession by touting low prices on necessities. Its same-store sales — the comparison of sales at stores open at least a year, and a key indicator of a retailer’s performance — have ticked up 3.7 percent, excluding fuel sales, in the most recent quarter.
Meanwhile, Pleasanton, Calif.-based Safeway had been in the midst of an ambitious nationwide overhaul of its stores into upscale “lifestyle” markets just as the economic downturn hit. Many consumers associated Safeway’s new wooden floors and array of organic products with a perception of higher prices, causing comparable same-store sales to decline 0.7 percent, excluding fuel, for the first quarter of 2009.
Safeway’s double-coupon move prompted Denver resident Denise Gomez to shop the grocery store last week for the first time in several weeks after going out of her way to shop at Wal-Mart.
“Now, if I spot a good coupon on something I use a lot, I’ll probably go to Safeway instead,” Gomez said.
Although coupons traditionally have reached shoppers through pre-printed promos — Safeway, for example, runs newspaper ad circulars on Wednesdays and Sundays — consumers increasingly are skipping the scissors when culling bargains. The number of consumers who use only coupons printed from the Internet rose 46 percent last year, to 6 million, according to Coupons.com.
The Mountain View, Calif.-based company, which offers discounts through its Web site as well as through Facebook and Twitter, recently announced that in the first five months of 2009, the savings printed on its digital coupon network surpassed the $313 million in value printed in all of 2008. Ready-to-eat cereal, baby products and baking ingredients are among the most popular coupon categories.
“We see no signs of a slowdown and are targeting to print approximately $1 billion in savings by the end of the year,” Steven Boal, CEO of Coupons.com, said in a news release.
Grocery stores and food manufacturers are testing other ways to reach cost-conscious consumers. Unilever, the maker of brands including Breyers ice cream, Dove soap and Lipton tea, is experimenting with technology that lets consumers redeem digital coupons by scanning their cell phones at checkout. Cellfire Inc., which offers coupons via mobile phone or computer, announced partnerships this year with Safeway and King Soopers’ parent Kroger Co.
Gomez said she has yet to enlist her cell phone in her coupon collecting, but she now spends about 10 minutes a week going to sites such as Coupons.com to hunt down discounts on her family’s favorite products.
“It’s great to see your grocery bill go down when (the cashier) scans in all of your coupons,” she said.
coupon, grocery store, king soopers, recession, safeway, wal-mart
