Why Do Supermarkets Have Grocery Coupons?
Grocery coupons can really save money on groceries when shopping at the supermarket. But why would that supermarket discount the price of a product that may already be selling, to attract customers to purchase it at a lower cost?
Because they are counting on those customers to also purchase other items in store at a profit!
We all know that supermarkets discount the price of certain grocery items from time to time to attract customers to their stores, and for conveniences sake you may often purchase all of the items on your grocery shopping list at that one store. But what you may not know is that the grocery store isn’t necessarily the one ‘paying’ the price for having certain products on special… it is the manufacturer.
Not only does the manufacturer bear the bulk of the loss when selling products at a discount (some of this is shared by the supermarket chain) but the manufacturer often pays for this product to appear in the coupons mailer or flyer that gets sent to your mailbox each week, and will even pay for the product to be prominently displayed at the end of a grocery aisle in store as well. This kind of promotion can run into the thousands of dollars.
Why would they spend all this money? Because at certain times during the year what you the consumer spends on brand names is tracked across the till every time a purchase is made, and this spending determines what space a product gets allocated on the shelf in store.
Perhaps the best example of a company who understands this principle is Coca Cola. Walk into virtually any large grocery store chain and you will find almost an entire aisle full of Coca Cola branded soft drinks. Could this be due to soft drinks being the highest selling product in the grocery store? Sometimes, yes.
You see the cycle that spending is tracked is closely followed by Coca Cola, and they know that when the next cycle of tracking begins, if they provide grocery coupons for customers to purchase Coke at a substantial discount, the tracking will show that Coke branded soft drinks sell more than any other brand in store. And when it comes time to packing the shelves, they are given priority over other brands, because the supermarkets can see that if they devoted space to a different brand instead, they would not move as much product.
Tags: food prices, grocery coupons, grocery prices, grocery shopping list