Do fewer food coupons signal less CPG support for supermarkets?

July 31, 2014

Refrigerated categories lead decline, and portend problems ahead.

New Marx data show a 3.9% decline in food coupons distributed during the first half of 2014, with the most pronounced drop occurring in refrigerated categories.  Coupons also had shorter expiration dates (8.2 weeks, down 1.3%) to build shopper urgency, and higher weighted average face values (80 cents, up 6.4%) to appeal more to shoppers.

By contrast, nonfood manufacturers issued 8.2% more coupons – though also with shorter expiration dates (6.3 weeks, down 2.0%), and higher face values ($1.73, up 2.1%).  The coupon increase stems partly from several health care and personal care brand makers, which turned to multiple-paged themed FSI coupon events to “break through promotion clutter with shoppers and create larger merchandising opportunities with retailers,” notes Dan Kittrell, vp-account solutions at Marx, a Kantar Media solution.

He further suggests the refrigerated foods drop in coupons issued “may reflect unique challenges for these categories…securing incremental in-store display support, avoiding out-of-stocks on the shelf, and aligning with shoppers’ limited ability to stock up during promotions.”

This last point intrigues us the most at The Lempert Report – because the loss of Stock-Up Trips is a sure sign of paycheck-to-paycheck food buying that continues to pose immense strategic challenges to supermarkets that need to (a) show value to consumers, and (b) grow their top and bottom lines to remain viable.

When food manufacturers feel the classic activity of couponing may not provide a desired lift, it reinforces the vulnerability of food stores to smaller, more convenient outlets for more frequent yet lower-ticket Quick Trips.  It also signals a bigger message to us that alternate formats continue to encroach steadily on food and nonfood sales.

More evidence:  These alternate channels took the Top 6 spots for “retail promotion pages circulated with traditional FSI vehicles” during the first half of 2014, shows Marx.  They are Walmart, Walgreens, Target, Family Dollar, Dollar General and CVS.  In all, retailer promotion pages soared by 26.8% to more than 14.5 billion pages in the period; Walmart’s alone rose 45.9% to more than 5.2 billion pages.