The coupon dilemma in Puerto Rico

Articles
July 18, 2011

The coupon dilemma in Puerto Rico

Retailers in Puerto Rico are faced with a serious problem: Most of their shoppers do not use coupons, which seems antithetical since food prices are about the same as in mainland U.S. stores while household income is a little over half that of the average family in the U.S.

Retailers in Puerto Rico are faced with a serious problem: Most of their shoppers do not use coupons, which seems antithetical since food prices are about the same as in mainland U.S. stores while household income is a little over half that of the average family in the U.S.

Retailers point the finger at culture. About one-third of Puerto Ricans are on the SNAP program and before that on food stamps. They say there is a stigma attached to using coupons which remind people of the food stamps of yesteryear. And while retailers and brands want to use coupons to help ease the pain of high prices, as well as introducing new products to their shoppers, their attempts haven't been effective.

Coincidentally (and important to note) is that out of a population of just over four million, three-quarters of them have cell phones and almost half of those use their phones to surf the Internet to the tune of two hours and 37 minutes each day, according to the 2011 study conducted by the Sales & Marketing Executives Association of Puerto Rico. Internet use by phone on the island has doubled since 2009, and over 1,300,000 Puerto Ricans use social networks on a regular basis.

Coupon problem solved. Or at least the solution is apparent. It appears that none of the mobile coupon services that are present on the mainland have spread south to the island yet. Nor have many of the food or retailer apps. It is clear to us at The Lempert Report that not only is Puerto Rico a prime target for the technology, but here is a society that already is very comfortable (we might even suggest more comfortable than their U.S. brethren) with using their cell phones for much more than conversation. Look for Puerto Rico to fast track mobile couponing, retail price comparison apps, and other food tools. And the time is now.

The retail environment on the island is changing dramatically as Econo continues to steal share from other traditional retailers and while Walgreen's continues to build new stores expanding their food offerings and Walmart (now testing three small format stores on the island) refocuses away from large format stores to their new concept.