Will dropping double coupons and senior discounts cost Kroger customers?
A decision by Kroger to drop double coupons and senior discounts along with a switch to lower everyday prices in its Nashville region is big news to customers who shop in stores affected by the new policy.
Promotional go-to’s such as coupon doubling, senior discounts and BOGO (buy one, get one) offers are commonly used by grocers that rely on a high/low pricing strategy to drive traffic and turns. Unfortunately, these very same practices often train customers to shop for promotions, putting further margin strain on the supermarkets.
Kroger is positioning the move as a way for more customers — beyond seniors and cherry-pickers — to benefit from lower prices The new policy will go into effect on March 15 and affect 96 stores in parts of Tennessee, Kentucky and Alabama. Other Kroger divisions in Atlanta and Memphis have previously dropped double coupons. Alabama stores in the Nashville region have also discontinued double coupons.
“Only a very small percentage of our customers double coupon,” Melissa Eads, a Kroger spokesperson, told The Tennessean. “And with the increase in digital coupons, not as many people use paper coupons any more. They are just so much easier and digital coupons have never been doubled.”
The Nashville region previously cut its senior discount, available on Wednesdays, from 10 percent to five percent in 2014. The program, which is available to anyone 60 years old and up, matched Publix, which continues to offer the perk to older shoppers.
- Kroger Nashville ends double coupons and senior discounts – The Tennessean
- Kroger Discontinues Senior Day, Double Coupon Deals – WKTF
DISCUSSION QUESTIONS: Are promotional offers such as double coupons and senior discounts still useful in driving traffic and turns in today’s competitive grocery market? What are the best alternate strategies for supermarket operators?
Richard J. George, Ph.D.Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Richard J. George, Ph.D.Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Dr. Stephen NeedelManaging Partner, Advanced Simulations
Dr. Stephen NeedelManaging Partner, Advanced Simulations
Richard J. George, Ph.D.Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Richard J. George, Ph.D.Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Dr. Stephen NeedelManaging Partner, Advanced Simulations
Dr. Stephen NeedelManaging Partner, Advanced Simulations
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9 Comments on "Will dropping double coupons and senior discounts cost Kroger customers?"
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Retail Transformation Thought Leader
Kroger has had a reputation among extreme couponers because of their double coupon policy for some time. Given Kroger’s recent investment in advanced analytics, I suspect they’ve looked at their data on coupon redemption and found that outside of these extreme customers, very few actually leverage this policy and few will miss it. Ultimately, if extreme discounts and coupons are what drive customers to your store, you’re playing in a race to the bottom from which you’ll eventually have a terrible time recovering. Shoppers can become easily trained to wait for these super discounts and avoid shopping with you until they get them. Better to wean them off now while you still can!
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Strategy Architect – Digital Place-based Media
The empowered consumer (being one myself) will begrudge a reward for loyalty being withdrawn. The smart marketers at Kroger have surely projected the cost of reduced loyalty as their location becomes but an option as patrons vote with their feet and wallet. Customers have longer memories than future-focused, office-bound marketers might realize. As the discount “campaign” (what else can Kroger now call it?) that wooed patrons is over, some alternative points of value must also be offered or existing ones communicated. I am the biggest fan of providing better in-store experience over margin reduction programs. Experience has high value for traffic and conversion.
Managing Partner, Advanced Simulations
I’m not sure that double coupons are that much of an incentive. But I would miss my senior discount on Wednesdays. The local senior homes bus people to Kroger and Publix on Wednesday and the stores are packed. I can’t see Kroger giving that up here in Atlanta given the competition with Publix.
Global Vice President, Strategic Communications, SAP Global Retail Business Unit
Well the other states can give it a try but Senior Day in Arizona is big. The stores are packed and seniors wait for it every month. From the data they pull from this region I am confident that they will stick with their pricing and discounts — it is the only way that they keep up with Walmart and Safeway and the up-and-comer Sprouts. Scottsdale, AZ is a popular market for retailers. A mix of ages — with more and more nearing retirement age.
sales management consultant
We all remember a unilateral move similar to the one we see here by retailer J.C. Penney. As I recall, the plan cost the company dearly and rendered its author from famous to foolish. Perhaps the age of final lowest price is finally here. This would certainly cut checkout time and costs, maybe for reasons not sought after (like fewer and fewer customers). There might be a couple businesses not immune to the benefits for this plan like dentist offices, church memberships and of course state government businesses with tax structure and codes like the kind that moved Nestle from California to Virginia. We all know that price, checkout time and ease and delivery/out-of -stocks drive traffic into a retail environment of any kind. This should be the direction of a retailer that is focused on turn to make an acceptable profit. No lines, no shortages and the greatest incentives in the market sell. Success relies on strategic improvements and not surgical reductions and removal.
VP & GM, Business Development, Precima
Food Regulatory Consultant (labeling, advertising, promotions)
Retail Solutions Executive, Teradata
I am more concerned with the brand perception that Kroger doesn’t care about the value shopper. Coupons and discounts lure an audience that may turn elsewhere if they lose those privileges. Look what happened to J.C. Penney when it dropped its coupons in 2012 and sales dropped dramatically. Macy’s did the same years before, and it, too, restored coupons. Part of the excitement for die-hard shoppers is the thrill of getting a deal. Kroger may turn away this segment of audience and, with higher prices than some competitors, it may lose seniors as well, and that is still a huge market … and a market with buying power. To combat this, Kroger will need a consistent pricing strategy that lowers prices across the board in order to overcome the perception that they are not simply more expensive that could occur from dropping the double coupons and senior discounts.