Newspaper coupon distribution flat in 1993 p. 29

By: Dorothy Giobbe LAST YEAR, FOR the first time in 20 years, the number of coupons distributed in newspapers didn't increase, according to research by Carolina Manufacturers Service Inc. (CMS).
Sharon Joyner-Payne, vice president, account management services for CMS, discussed current coupon trends and the forces driving them at the recent U.S. Coupon Forum in New York City, sponsored by the Audit Bureau of Circulation.
In 1993, coupon distribution leveled off after nearly 20 years of posting gains. Partly this was due to a difficult economic climate, in which manufacturers had to contend with an increasingly competitive marketplace. Also, budget crunches meant that marketing and promotions often were the programs that were scaled back first.
Additionally, strategies such as "every day . . . low price" drove down prices as competitors followed suit, cutting back the number of promotions.
For the first six months of 1994, coupon distribution was down about 3%, compared to the same period last year, Joyner-Payne said. In the first six months of this year, manufacturers distributed 164 billion coupons. Redemption rates also dropped for the first six months of 1994, from 3.8 billion coupons in 1993 to 3.5 billion.
Joyner-Payne said that the "most significant factor" affecting coupon redemption rates is the fact that manufacturers are using shorter expiration periods on coupons than ever before.
During the first half of 1994, 85% of all coupons distributed had expiration periods of five months or less. The expiration period has grown shorter over the past few years. In 1988, the average coupon expiration date was after 7.6 months, but in 1993 it fell to 3.8 months.
"The expiration period does have an effect on redemption rates," Joyner-Payne said. Shorter periods might not allow consumers enough time to redeem the coupons, and CMS research has shown that the longer the expiration periods, the higher the redemption rate.
The average face value of coupons distributed in 1993 was 54?, while the average face value redeemed was 51?, Joyner-Payne said. To date, for 1994 the average face value distributed is 55?, and the average face value redeemed has stayed the same, at 51?.
In the last few years, manufacturers used fewer in-ad coupons, Joyner-Payne said "particularly the higher values such as the frees and the buy-one-get-one frees, because those are the ones that have the higher risk and the higher liability."
However, she added, so far this year, in-ad redemption has increased by 29%, and unless something changes in the latter half of the year, that trend is expected to continue.
In ad-face values are higher than regular manufacturer's coupons, with an average of $1.38, Joyner-Payne said, so "needless to say it certainly offers the consumer some additional savings and value."
Recently, CMS commissioned the Roper organization to perform a consumer attitude study. The poll found that 86% of those surveyed feel that coupons save them money and help to combat rising prices. In addition, 89% said they preferred to receive coupons in FSIs over any other method, Joyner-Payne said. The study also found that 44% would not buy a new brand unless it had a coupon.