U.S. shoppers save $3.6 billion by using CPG coupons - digital distribution rises 13 percent.
Originally published in the Facts, Figures & the Future weekly e-newsletter. Click here for a free subscription.
Millions of U.S. households continue to be squeezed by the slow recovery of the U.S. economy. Meat price hikes also intensify pressure on budgets. This tandem led consumers to redeem 2.9 percent more packaged goods coupons in 2014 than in 2013.
People felt compelled to save where they could when acquiring food, beverage and household goods - and coupons secured them $100 million more in savings this past year, a total of $3.6 billion.
Marketers helped that happen by increasing the average face value of coupons distributed: food coupons rose 6.0 percent to $1.06 in 2014 from $1.00 in 2013; non-food coupons rose 3.5 percent to $2.05 from $1.98. This led to a 6.2 percent average jump in coupon face value to $1.72, up from $1.62. In all, the face value of distributed coupons rose by 4.5 percent to $533 billion in 2014 from $510 billion in 2013.
In our view at Facts, Figures & The Future (F3), these figures from the NCH Annual Topline View CPG Coupon Facts for Year-End 2014 represent a center-store crowd of manufacturers increasing its commitment to a classic consumer savings instrument - in order to help its own volume movement figures vs. the more robust sales advances made by perimeter perishables departments in the supermarket.
The coupons actually redeemed by consumers didn't fully skew to those bearing the highest values. Food coupons turned in were $1.00 apiece on average; non-food coupons were $1.72 on average. Also, the 2.75 billion coupons redeemed in total in 2014 - to achieve their $3.6 billion in savings - were 1.8 percent fewer than in 2013. People found them mostly in freestanding inserts (FSIs), which were home to 92.2 percent of all CPG coupons distributed.
"In the food segment," explains Charlie Brown, vice president-marketing at NCH, "marketers distributed 10.4 percent fewer coupons and redemption fell by 10.3 percent from 2013. With 43 percent of food coupons requiring the consumer to purchase two or more items [up from 42 percent in 2013], a drop in redemption volume had an even greater impact on the quantity of product moved with a coupon for food marketers and retailers."
This trend caused the grocery channel to redeem 5.1 percent fewer coupons in 2014 and mass to redeem 3.3 percent fewer coupons in the same period. "Yet the vast majority of redemption - nearly 80 percent - occurred in these two channels," he added.
By contrast, non-food marketers issued 3.5 percent more coupons, and redemption rose 11.4 percent, reversing a prior-year decline. The drug channel, up 16 percent, benefited the most. Within the non-foods sector, just 19 percent of coupons [down from 20 percent in 2013], required multiple purchases, the NCH data show.
The average duration of food coupon offers easily beat those of non-foods. On average, food coupons remained valid for 10.3 weeks, up from 10.1 weeks in 2013, and non-foods coupons remained valid for 7.4 weeks, down 7.8 from 2013.
Marketers issued 13 percent more digital coupons in 2014 than in 2013. Still, these represent less than two percent of all coupons distributed.
The Top 10 retailers to redeem CPG coupons in 2014 were: Walmart, Kroger, Target, Walgreens, Publix, CVS, Defense Commissary, Ahold, Safeway and Meijer.