Savings Clubs Could Bond Spenders to Supermarkets

Articles
June 24, 2010

Savings Clubs Could Bond Spenders to Supermarkets

Here we are at the midpoint of 2010. The recession persists, and supermarkets are already planning their holiday season events.

Here we are at the midpoint of 2010. The recession persists, and supermarkets are already planning their holiday season events.  

The Lempert Report suggests that stores add one more classic offer to their Christmas, Chanukah and Kwanzaa celebration portfolios—a savings club that could help lock in loyal shoppers who plan to host gatherings of families and friends at the end of this year. Offer a few percentage points of interest, and savings-minded shoppers will feel they’re getting more of a deal.

We reached back about half a century to suggest this idea. We remembered when our mothers and grandmothers took $1 a week to their favorite supermarket and got $52 back to buy foods for the holidays.  A good deal all around: extra savings for shoppers, and a timely bond for the store with productive spenders. This could be easy to revive, 2010 style, using electronic deposits through a retailer website or a card swipe at a store’s service desk.

Why should this idea click now? New NPD Group research shows financial stresses still burden shoppers. “Nearly one in five consumers expect to be worse off 12 months from now than they are today, and half of all consumers expect their financial situation to be the same as it is today,” said the What’s Next on the Road to Recovery report.

People said they plan to spend less on groceries over the next six months, particularly households that bring in less than $35,000 annually. They said they’ll also use coupons for foods and beverages; stock up when items are on sale; seek sale prices in circulars; trade down from costlier brands; and seek coupons online.

Food and beverage manufacturers and retailers need to understand consumers’ mindset as they rethink marketing communication programs for the recovery, said Dori Hickey, director of product development and report author, NPD. “It appears the road to recovery will be a long one [to them],” she added.  

Toys “R” Us is accepting cash or credit payments in just such a program, and is paying 3% interest, the New York Times reported. “Given the type of economy that we’re in, we wanted to give them as much time as possible to start planning for their budgets,” Greg Ahearn, senior vice president for marketing and e-commerce for the toy chain, told the paper.

Families buying gifts for children aren’t the only ones who’d like to receive fewer credit card bills in January. The Lempert Report believes this planning tool could effectively tie in with the many savings strategies shoppers continue to deploy when buying foods and beverages. If this idea works for the holidays, perhaps it could be extended to Easter 2011 and other occasions throughout the year.