Markets face off in new round of coupon wars; Competition for suburban dollar is tougher than ever.
There's a food fight going on in the communities east of Worcester, and it's being fought with coupons.
Grocers in Northboro, Westboro and Shrewsbury have revved up their competition in recent months by distributing coupons for free bread, butter, eggs, juice and even gourmet oil in an effort to win new customers or appeal to existing customers.
It's a supermarket skirmish that likely can be explained in one word: Wegmans.
Privately held Wegmans Food Markets Inc. of Rochester, N.Y., opened its first New England supermarket in Northboro last October in a flurry of publicity, distributing to local homes a number of coupons for free store-brand products. Not to be outdone, two other supermarket chains with stores in the area have distributed coupons of their own for freebies, and one promises to honor competitors' coupons.
"The coupon madness is definitely one business responding, reacting to another business' marketing approach," said shopper Jane M. Walsh of Northboro. "I have found the whole thing entertaining."
The coupon war is playing out in an affluent suburban area where about six different supermarket chains plus a warehouse club sell groceries.
Wegmans, Stop & Shop Supermarket Co. of Quincy and Roche Bros. Supermarkets of Wellesley have all mailed out coupons in recent months for free merchandise. The coupons generally require shoppers to present store loyalty cards and make a minimum purchase of anywhere from $10 to $25. The offers include store-brand products and name brands, depending on the retailer.
Coupons, meanwhile,enjoy surging popularity, with more than 3.5 billion coupons for packaged goods redeemed last year in the United States, up 6.1 percent over 2010, according to coupon processor Inmar Inc. of Winston-Salem, N.C.
Although coupons can be an effective marketing tool if businesses target the right customers with the right offers, they can also backfire, said Matthew B. Keylock, senior vice president of new business development and partnerships at DunnhumbyUSA, a Cincinnati, Ohio, customer research subsidiary of United Kingdom retailer Tesco Plc.
"I think it's quite a good tactic to use for new store openings, for instance, those sorts of things to bring people in," Mr. Keylock said. "Once you've acquired (the customer) you want to be very careful about training customers to expect a deal every week."
Wegmans typically issues coupons for free merchandise when it opens a store in a new market as a way of introducing itself to potential customers, according to Jo Natale, director of media relations for the chain.
"We are new to town," she said. "There are many, many people who have never been to a Wegmans store. It's a little incentive to get them through the doors that first time."
Roche Bros. began issuing coupons for free food and merchandise about six months before Wegmans opened as a result of market research, a company official said.
"Certainly one of the things that came out was they (shoppers) were looking for more value in different ways," said Arthur Ackles, Roche Bros. marketing director.
Stop & Shop spokeswoman Suzi Robinson said in a message she could not say much about the company's promotional strategy as it was "proprietary information."
"Certainly promotional coupons are part of any retail business, and we do use it to stimulate interest in our stores," she said.
For some shoppers, the coupons have been inducements to shop. Alison Cosgrove of Northboro, who describes herself as a coupon shopper, said publicity surrounding Wegmans left her skeptical but coupons drew her in.
"If you're going to offer me something free, I'm going to go to that," she said.
It's not clear how long retailers in the area will continue issuing coupons for free food and merchandise. Probably not long, because it's costly, according to Kurt Jetta, chief executive of TABS Group, a marketing and research firm in Shelton, Conn., that specializes in retailing.
The strategy also raises questions about the hold a retailer has on its customers if shoppers can be lured elsewhere by coupons, he said.
"If that is enough to shoo away customers, then they don't have a very strong brand to begin with," he said.
Not all grocers in the Northboro-Westboro-Shrewsbury area have embraced freebies, at least not as frequently as competitors.
Price Chopper, owned by the Golub Corp. of Schenectady, N.Y., and operator of a supermarket in Shrewsbury, offers free items on occasion. Yet it will honor competitors' coupons, according to Vice President Mona Golub.
BJ's Wholesale Club of Westboro also offers the occasional freebie, such as a free package of ribs for members who bought four items from a list of about 10 foods during the days leading up to the Super Bowl. But BJ's does not accept competitors' coupons, according to spokeswoman Catherine Troutman.
Hannaford Supermarkets of Scarborough, Maine, which operates a store in Marlboro near the Northboro line, offers coupons for free merchandise only occasionally and does not honor competitors' coupons. Hannaford spokesman Eric W. Blom said that is deliberate.
"We actually believe in something called the everyday-low-price philosophy, where we try to limit the chasing around that customers have to do," he said. "We try to keep prices low every day."
The scene: More than 3.5 billion coupons for packaged goods were redeemed last year in the United States, up 6.1 percent over 2010.
Locally: The coupon war is playing out in an affluent suburban area where about six different supermarket chains plus a warehouse club sell groceries.
The quote: `Once you've acquired (the customer) you want to be very careful about training customers to expect a deal every week.' - Matthew B. Keylock, DunnhumbyUSA
CUTLINE: Suzanne Flanagan of Shrewsbury shops with coupons at Wegmans, and is checked out by Madeline Duhamel.
PHOTOG: T&G Staff/CHRISTINE PETERSON
|Printer friendly Cite/link Email Feedback|
|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Feb 21, 2012|
|Previous Article:||Perfect fit for an environmentalist.|
|Next Article:||Cyber war games; Monty Tech's Marine JROTCs heading for national cyberdefense finals.|