Kroger Says Paper Coupons Boost Customer Satisfaction and Unit Sales
Paper coupons can boost a retailer’s appeal to customers who are older or who don’t have the latest iPhone, according to Kroger executives.
During the grocery giant’s Thursday (Sept. 11) earnings call, Kroger Chairman and CEO Ron Sargent said the company is reintroducing paper coupons in every store as part of an effort to simplify its promotional offers.
“Our customers are recognizing these changes, and they’re giving us credit for them,” Sargent said. “We know this because customer price perception improved in nearly every division this quarter, and we saw another quarter of sequential improvement in share.”
Kroger’s move to bring back paper coupons was flagged by Seeking Alpha in a Tuesday (Sept. 16) report.
Sargent said during the earnings call that he had talked with “hundreds and hundreds” of customers over the past six months and heard that older consumers who may not be as digitally proficient as younger ones want to get the same deals that are available on smartphones.
“And so we wanted to give them an equal playing field,” Sargent said. “And I think the end result, we’ll get incremental business from that.”
Sargent said he also found that customers “who don’t have a $600 iPhone” were disenfranchised by digital coupons.
“So, we’re really trying to appeal to a broader customer segment, not only people that are very digitally savvy, but also people who are not or not able to be,” Sargent said.
David Kennerley, chief financial officer at Kroger, said during the call that the benefits of paper coupons are measurable in terms of increases in unit sales and positive feedback from customers.
PYMNTS reported Thursday that Sargent said during the call that low- and middle-income consumers are turning to coupons in an effort to save money at a time when they feel stressed about the economy.
“They’re using coupons more. They’re making smaller, but more frequent trips and they’re buying more private-label products,” Sargent said.
During an earlier earnings call, in March 2024, Kroger reported that it delivered over 4 billion digital coupons in 2023, which was 1 billion more than it delivered in 2022.
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