Over the past few years, supermarket chains have faced heat for their increased use of digital coupons.
In 2022, a coalition of national consumer groups sent a letter to supermarket industry leaders, flagging that digital coupons amount to “digital discrimination.”
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“For a significant segment of the population – the millions without internet access or a smartphone – sale items in weekly store circulars designated as ‘digital,’ ‘digital-only,’ ‘digital coupon,’ or ‘digital offer’ are simply unavailable to them,” reads the letter.
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“As a result, people who are often elderly or with limited income, are forced to pay higher grocery prices than their more tech-savvy counterparts.”
The coalition urged supermarket leaders to “bridge this digital divide” by offering an offline alternative to digital coupons.
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Kroger quietly rolls out a major solution
Amid this push, Kroger (KR) has decided to make a significant change in its stores.
Over the past few weeks, Kroger has been placing “Weekly Digital Deals” flyers at its store entrances that contain pictures of its digital offers, according to a recent report from the Detroit Free Press. Customers who have loyalty cards can obtain these deals by scanning the barcode on the flyer at self-checkout machines or registers.
“Scan your Card or enter your Alt ID at checkout, then scan this Weekly Digital Deals flyer to automatically clip each digital coupon,” reads a new sign at Kroger store entrances.
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The sign also states that coupons can be used up to five times per transaction and that new deals are available weekly.
“We are always listening to our customers to create a better shopping experience,” said a Kroger spokesperson in a statement to the Detroit Free Press. “To make it simpler for our customers to take advantage of the full value our stores offer, we are providing an easy-to-use flyer that customers can scan to save with digital coupons.”
Kroger recently sounded alarm on concerning customer behavior
The move from Kroger comes after its CEO, Ron Sargent, warned during an earnings call last month that the company’s customers are cutting back their spending.
“Customers continue to spend cautiously in an uncertain economic environment,” said Sargent. “Many customers want more value, and as a result, they’re buying more promotional products and more Our Brands products. They’re also eating more meals at home.”
He also said that customers are relying heavily on coupons to save money, despite Kroger lowering prices on over 2,000 products earlier this year.
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“We are kind of seeing a shift into larger pack sizes and increased use of coupons,” he said. “We’re seeing some discretionary spend that’s a little softer in areas like snacks and adult beverages, pet, general merchandise categories.
“So, you know, I think in terms of the consumer, we expect the consumer to remain cautious throughout the year. And we’re responding to that with simpler promotions, coupons, lower prices, and a lot of own brand choices.”
Amid this major change in customer behavior, Kroger announced plans last month to close 60 low-performing stores nationwide over the next 18 months.
“We don’t take these decisions lightly, but this will make the company more efficient, and Kroger will offer roles in other stores to all associates currently employed at affected stores,” said Sargent during the call.
“To recap, our top priorities are clear. We’re going to move with speed. We’re gonna concentrate on our core business, and we’re gonna run great stores. This is how we’ll position Kroger for long-term performance.”
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