The Grocery Pricing Transparency Law, passed in April and refined in July to address concerns from the grocery industry, was drafted to give equal access to discounts to the city’s shoppers who cannot use online coupons through smartphones or other digital devices.
The way stores are adapting to the city ordinance is uneven, with some doubling down on coupons, literally, by offering shoppers printed versions of digital discounts, while other stores are canceling the digital coupons that manufacturers did not also provide in print. Both approaches follow the law by creating equal access, within their stores, for online and offline deal hunters.
More coupons
At Ralphs and Food4Less, two Kroger brands in San Diego, digital coupons are sticking around. To comply with the law, Kroger has added paper flyers for in-store shoppers to access digital offers.
“To make it simpler for our customers to take advantage of digital coupons in our stores, we are providing an easy-to-use flyer they can scan at check out. Customer can simply grab a flyer in our stores or ask for help from one of our friendly clerks,” a Food4Less/Ralphs spokesperson said in an emailed statement.
The chain’s interim CEO recently talked about a fresh commitment to paper coupons.
“We’re making our promotions simpler and have continued to reduce complex promotional offers. Additionally, we are making it easier for non-digital customers to take advantage of all the value Kroger offers by reintroducing paper coupons in every store,” Ronald Sargent, Kroger’s chairman of the board and interim CEO, told investors in an earnings call last month.
Sargent said the company is meeting customers’ needs by expanding its coupon options.
“Customers are feeling pretty stressed about the economy,” he said. “They’re doing things to save money. And when you look at income cohorts, low and middle-income households are really looking for deals. They’re using coupons more. They’re making smaller but more frequent trips and they’re buying more private label products.”
Paper coupons, he added, help less digitally connected shoppers access deals — while also helping the company access a broader range of shoppers.
Other stores, like Stater Bros. Markets, did not offer many details.
“Stater Bros. Markets is committed to fair and transparent pricing. Our San Diego store will comply with the City’s new ordinance, and an in-store alternative to digital coupons will be available for customers,” it said in an email to the Union-Tribune.
Fewer coupons
In San Diego’s 29 Vons, Albertsons and Pavilions, the ordinance has hastened the end of certain coupons and discounts, digital and print alike.
Vons, owned by Albertsons, will provide in-store flyers displaying digital coupons that can be redeemed at checkout, but those deals will be fewer. This is because many manufacturers do not offer physical versions of digital discounts, it said in a message to customers
“Some vendors and manufacturers have not provided alternative formats for their digital offers resulting in a reduced number of promotions and digital deals available in the impacted San Diego stores,” Vons said. “We understand this may be disappointing and are actively working with our vendor partners to explore solutions that maintain the value and savings you expect.”
This reduction in coupons is an unfortunate consequence of San Diego’s ordinance, the company said Tuesday in a statement: “The City of San Diego indicated this ordinance is about fairness to customers who may not use smartphones or apps. Unfortunately, the ordinance has resulted in severely limiting the number of discounts and coupons that all customers can enjoy in our San Diego stores.” The company encouraged dissatisfied shoppers to contact the city.
To use digital coupons at Albertsons, Vons and Pavilions chain stores, shoppers can instead head to the 41 stores in San Diego County that are outside of San Diego city limits.
Sharply different approaches
The law requires stores that use digital coupons to give all customers identical discounts that are not digital. It aims to help seniors, people with limited internet access and shoppers who do not read online coupons due to language barriers.
Why have some grocers found a way to offer non-digital discounts and others did not?
Daniel Conway, the vice president of government relations for the California Grocers Association, said the different responses from stores was to be expected, especially given how new and unusual the law is.
“We’ve never seen something like this in the country before,” he said. Stores, he added, are still “figuring out the best way that they can not only practically and operationally comply with the law, but also do it in a way that’s going to best cater to the particular clientele that they have at that store.”
Retailers also had to move fast, he added.
“I think there’s been a fair amount of heartburn just to understand what it’s going to take to operationalize something like this.”
He said lawmakers are sometimes so focused on worst-case and unrealistic scenarios related to technology that they drift into unintended consequences.
“If you overreach, the unintended consequences of that overreach can completely undermine your premise of, hey, we want flourishing communities with grocery stores that offer fresh produce and reasonable prices to everyone. That all sounds great, but the more we have to do to figure out how to make physical coupons available in the store, that’s just going to make it more complicated and more expensive to operate grocery stores in your community.”
Retail industry expert Burt P. Flickinger III applauds the new law but is “disappointed that Albertsons isn’t more corporately constructive and conscientious to protect consumers.”
The path Albertsons has taken, of not offering print coupons to match digital ones, “makes no sense,” said Flickinger, managing director of Strategic Resource Group, a Southern California-focused retail finance consulting firm.
Full price products linger on shelves, so it’s good business to offer discounts in print, not just online, especially when consumers are struggling financially, he said.
Getting a coupon circular printed is as easy as picking up the phone and calling corporate merchandisers and printers, Flickinger added.
“The manufacturer is 100% locked in to do what the retailer wants, or the retailer can take action against the manufacturer — for example, reducing the number of brands and sizes (it) carries. … So there’s no manufacturer anywhere that’s going to turn this down,” he said.
In a statement, City Council members Sean Elo-Rivera and Marni von Wilpert, the ordinance’s champions, praised the early efforts and noted the challenges ahead.
“Many grocers, including Ralphs, have already stepped up and are providing in-store alternatives to digital coupons —proving that compliance is both achievable and consumer-friendly.
“We recognize that some stores have chosen to remove digital discounts instead of offering in-store options. That decision is not required and is, instead, a choice that undermines the intent to expand, not eliminate, access to savings. … we do hope and expect all grocers, including those who have yet to do so, will follow the lead of others who are successfully offering in-store discounts to meet the ordinance’s goal: fair access to savings for all. We look forward to seeing all retailers — including Albertsons, Vons, and Pavilions — follow the lead of other grocers honoring the spirit of this law and supporting their customers.”
The city will monitor shopper feedback, as well as whether discounts are available to all customers regardless of digital access and whether “retailers comply in good faith without reducing customer savings,” the city statement said.
Convenience stores, warehouse clubs and pharmacies are exempt. Residents who believe a store is not in compliance can report concerns to the City Attorney’s Affirmative Civil Enforcement Unit. To enforce compliance, the city will first give retailers written notice. Retailers will have 15 days to address issues.
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