Disrupted supply chains and other factors have driven up what consumers pay for food and energy, sending inflation soaring to its highest level in 40 years. May’s consumer price index showed food prices rose 10% from a year earlier, and grocery store prices climbed nearly 12%.
Consumers are changing their shopping habits to save as much money as possible. Many are turning to coupons, whether through their local pennysaver publication or by using digital coupons on their smartphones. However, as consumers are discovering, these offers are not as plentiful as they once were.
Lydia DePillis, business reporter for The New York Times, explained why coupons are disappearing. She discussed the impact of inflation on the coupon industry with “Marketplace” host Kai Ryssdal.
The following is an edited transcript of their conversation.
Kai Rysdal: You know, I saw this story the other day, and honestly, I was like, “My God, coupons are so 20th century.” Right?
Lydia DePillis: Sure. They are not. People still love them.
Rysdal: Well, say more, right? Because we are now in a digital economy and coupons have been there. But still, they are a little weird.
DePillis: It’s true. And I share your memories of, well, in my case, a mother who didn’t cut coupons, but put them in the paper and wondered, “Who uses these things?” But a lot of people use them. Like, on the order of almost 400 billion coupons were distributed towards the end of the 90s. And that kind of flows with the distribution of newspapers. And it went down for a number of reasons, both redemption rates, that is, the share of coupons given out that ended up being used, and also the total number of coupons that were given out.
Rysdal: There was this brief comeback during the Great Recession, as you pointed out in this article, and there were the extreme coupon TV shows, which I watched more, really, than I would like to admit it because it was pretty amazing. But we are now in 2022. And they have advanced technologically while the user base may not have.
DePillis: Sure. So a few things happened. You know, number one, you’ve seen this shift to all-digital, especially marketing, right? Brands and retailers see the benefits of being able to target people based on a ton of data they collect about you. So they thought, “Well, damn it, you know, our coupons aren’t reaching that many people anyway because newspaper distribution is down. Can we get people to use these things on their smartphones? The problem for brands and retailers is that the typical coupon user tends to be that senior citizen on a fixed income, or maybe someone who can’t, you know, afford a smartphone. . And so it just didn’t hit the demographic that typically consumes the types of discounts they used.
Rysdal: Yeah. And what do we see now with inflation at 8.5% and food certainly helping to lead the way? Is the use of coupons increasing?
DePillis: It’s hard to say at the time. The distribution of coupons has really dropped during the pandemic. And this is for several reasons. I mean, mostly, brands and retailers just thought, “Why would I add an extra incentive for people to buy products when there are shortages everywhere?” Do you get what you need, wherever you can, and no matter what brand? But now, in times of inflation, people would like to find more savings. But there just isn’t a lot of room to give. Retailers in particular are putting more pressure on brands to say, “You better cut your costs overall. We are not going to leave extra wiggle room in the budget for a discount.
Rysdal: You know, it’s funny, so my local Piggly Wiggly, when I check out – okay, it’s at the self-checkout because it’s always faster – but it still prints out coupons for me, and I let them hang around in there. Is there an adoption gimmick that maybe today’s buyers just aren’t interested in? They just want to get busy and get going because they have 14 different things to do.
DePillis: Yeah, I think that’s true. I mean, and I think it’s possible that people, once they understand that it’s actually quite easy to use digital coupons. I didn’t even know digital coupons existed until I made this story. But now I shop at the same grocery store every week. I buy the same things every week. And I did a little slicing, and it’s pretty easy and you can save some money, but it all depends on what that time is worth to you. And time and brain space, honestly, I mean, we have so much to keep track of. Maybe saving, say, $5 on your grocery bill isn’t something you want to compromise on.
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