CPG Coupon Redemption, Savings Down Y-O-Y In H1

July 24, 2012

nch-marketing-consumer-coupon-redemption-growth-h12007-h12012-jul12.pngUS consumers redeemed 1.55 billion coupons for consumer-packaged goods (CPG) in the first half (H1) of 2012, which represents a significant downturn of 11.4% from the same period in 2011, according to a study released [sign-in page] in July 2012 by NCH. This downturn also reverses a three-year growth trend of 2.9% in H1 2011, 7.9% in H1 2010, and 18.9% in H1 2009.

CPG marketers have maintained a relatively steady volume of coupon distribution in H1 2012, with 165 billion coupons distributed, down just 1.2% year-over-year from H1 2011. This is an improvement from H1 2011, which saw a 6.2% decline, but is far below growth rates from H1 2010 (12.7%) and H1 2009 (12.1%).

Redemption Declined Across All Retailer Formats

CPG coupon redemption volume declined across all retailer formats in H1 2012. Redemption volume at grocery stores declined the fastest (-14.6%), followed by drug stores (-12.8%), military commissaries (-8.4%), mass merchandisers including supercenters (-6.9%), and all other retailers (which includes convenience stores, warehouse clubs, variety and discount stores, down -0.8%).

Less Attractive Offers Drove Down Redemption

While CPG marketers distributed just 1.2% fewer coupons than in H1 2011, grocery manufacturers cut distribution by 7%. Consumers also had significantly less time to use the coupons that were available to them. For example, health and beauty care (HBC) manufacturers reduced average expiration periods by 17.1% to 8.7 weeks.

The discounts were also less attractive. The average face value on grocery coupons was down $.06 to $1.13, and the average face value on HBC coupons was down $.04 to $2.08.

Savings Down, but Redeemed Value Steady

Total consumer savings on CPG coupons declined by $200 million in H2 2012, to $2.1 billion, representing an 8.7% decrease. This comes after 3 consecutive years of increases, and is the lowest amount of H1 savings since H1 2009 ($1.8 billion). The decline can be attributed to declining redemption volume and lower attractiveness, as the average face value redeemed remained steady at $1.33, compared to $1.32 in H1 2011.

Coupons are consumers’ preferred method to save, but not their only option. Almost 2 in 3 shoppers changed their grocery shopping habits in the past 6 months to eke out as much value from their grocery dollar as possible, according to an April 2012 MarketTools survey. While coupons are the leading way by which respondents saved money (80%), roughly 3 of 5 turned to store brands versus name brands, used loyalty cards that offer discounts, or only bought items that were on sale.

About The Data: Coupons distributed and redeemed in the US Consumer Packaged Goods (CPG) marketplace were studied using NCH’s manufacturer client databases, data cleared via its retailer processing operation and other independent sources. The scope of the report includes manufacturer coupons of all paper and paperless media formats: Retailer in-ad coupons were not included. Consumers were emailed an invitation to participate in the survey, which was closed once it reached 1,000 completed responses. The responses were weighted by factors obtained from national census data to provide appropriate representations of demographic groups at summary levels.

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