New trends in grocery shopping are reducing coupon use

I frequently hear shoppers complain about the state of grocery coupons where they live. Common complaints include higher purchase requirements of coupons, lower values and fewer coupons available for products shoppers want.

Fortunately, product manufacturers who issue coupons are interested in making it easier for shoppers to use coupons. So the industry group Carolina Marketing Services sponsors an annual study of grocery coupon trends (findings of their 2007 coupon trend report are based on coupon usage in 2006).

Some of the CMS findings are a bit surprising:

For the first time since 2003, industrywide coupon activity decreased in 2006. Coupon redemption decreased by about 13 percent. However, coupon usage is still popular, with 142 million shoppers using grocery coupons in the past year.

Shoppers frequently tell me they cannot use coupons because they require the purchase of multiple items or the coupons expire too quickly. National figures refute these generalizations: 88 percent of coupons have expiration dates of two months or more past their issue date. Sixty-four percent of coupons require the purchase of only one item, and only 8 percent of coupons require the purchase of three or more items.

One change of note: The average value of coupons dropped by three cents, to $1.16 per coupon.

Declining use

Coupon usage has declined significantly since its high point in 1992. In 2006, shoppers redeemed 2.6 billion coupons. About 7.9 billion coupons were redeemed in 1992. Part of the decline in coupon use is due to the increasing trends of buying in bulk at warehouse clubs, buying private label products and using frequent shopper loyalty cards to save money on groceries.

Some shoppers tell me that their newspapers do not have as many grocery coupons today as they once did. The CMS study found that manufacturers distributed 286 billion coupons, worth $331 billion, in 2006. Newspaper circulars are still the No. 1 source of grocery coupons, delivering 89 percent of those 286 billion coupons to shoppers.

However, manufacturers, depending on their marketing strategy, place their coupon offers selectively by city. Larger cities' newspapers tend to get more coupon offers in their circulars. For example, I compared my newspaper's coupon circular to the circular carried in Honolulu's newspaper this week. My circular had 55 coupons, and Honolulu's paper only had 34 coupons (which were all for non-food items, like cleaning products).

Although it would be hard to feel sorry for shoppers fortunate enough to be living in Honolulu, there are other sources of grocery coupons that the CMS study found are popular with shoppers. Even though the majority of grocery coupons are found in the Sunday newspaper circulars, the redemption rate of newspaper coupons is less than 1 percent (.6 percent to be exact). By contrast, electronic discount coupons have the highest redemption rate of 41 percent.

Electronic discount coupons are the automatic discounts shoppers receive when they buy qualifying items. An example would be "buy four cartons of XYZ ice cream and receive $4 off your order immediately when you use your Club Card." With the advent of store loyalty cards, these discounts are becoming more common with retailers and are obviously popular with shoppers because they are so easy to use. Be sure to check your store's sales circular before you shop to see what its featured electronic discount is that week.

"Instant redeemable" coupons have the second-highest redemption rate of 20 percent. These are coupons manufacturers attach to a product's package to be removed and used at the time of purchase.

Although 20 percent is certainly higher than .6 percent for the newspaper coupons, what struck me was that 80 percent of the people who buy items with coupons on them do not even bother to take the coupon off the package to hand to the cashier! It is possible that customers expect the cashier to take the coupon off, and I can understand how easily the cashier could overlook the coupon. Therefore, be sure to take any product coupons off the package yourself, or let the cashier know the coupon is on the package.