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Coupon usage increases as year progresses

Thursday, March 12, 2009

Press release from the issuing company

LIVONIA, Mich. -- Valassis, one of the nation's leading media and marketing services companies, released research conducted by its subsidiary, NCH Marketing Services Inc., that provides new insight into consumer saving habits and manufacturer coupon trends during these recessionary times. Consumer packaged goods (CPG) coupon redemption during the fourth quarter of 2008 increased a dramatic 16.7% compared to prior year quarter, although total coupon redemption for 2008 was flat compared to the prior year, according to this annual report on coupon trends. The report also notes dramatically increased online coupon activity; distinct trend differences between health and beauty care (HBC) and grocery manufacturers; a significant shift toward mass merchandisers, dollar stores and drug store chains; and an overall progressively upward trend in coupon promotional activity in the second half of the year as the economy worsened.

"Challenges in the economy are most definitely influencing manufacturers and consumers as it relates to both distribution and redemption," said Suzie Brown, Valassis Chief Marketing Officer. "Every trend indicates these current buying and saving habits will continue to increase and value seeking will become a cornerstone of shopping behavior in the future. The RedPlum portfolio is incredibly well positioned to deliver the values consumers are seeking today and tomorrow." RedPlum helps consumers score more deals than ever. It provides an opportunity for consumers to save up to $1,000 a year or more by spending just 20 minutes a week taking advantage of coupons and special offers.

HBC manufacturers saw redemption rate improvements as a result of strategically using coupons during a downturn in the economy to motivate consumer purchases. HBC manufacturers tactically improved the attractiveness of coupons and distributed nearly 5 billion additional coupons in 2008. Overall, HBC coupons increased their average cents-off savings to $1.75 -- more than a 9% increase from the previous year; extended average offer expiration dates to 2.8 months; and substantially reduced their use of multiple purchase coupons. Meanwhile, grocery manufacturers began to reverse their conservative approach to couponing by distributing more coupons in the second half of 2008.

Overall, 281 billion coupons were distributed last year. The free-standing insert (FSI) continued to deliver nearly 90% of all coupons in 2008 with magazines, handouts and the Internet gaining share. Online coupon distribution grew faster than any other medium -- up more than 80% -- according to this report, although the Internet represents less than 1% of all coupons printed. Likewise, redemption volume of online coupons increased nearly 130% to 4.8% of all CPG coupons redeemed in 2008. Valassis offers online savings through its redplum.com destination site and network.

"These trends tell us that marketers are using the Internet more and more to reach consumers with coupons and consumers, especially in current economic times, are responding at an increasing pace to Internet coupons," said Charles Brown, NCH Vice President of Marketing. "As the year progressed and consumer demand grew, manufacturers increased the overall number of CPG coupons in the marketplace in the second half of the year and utilized targeted media to a greater extent. We continue to see increased demand for savings and value fueled by the state of the economy and that is particularly evident in the significantly increased redemption in the last three months of the year."

Other findings include:

- 94% of consumers say they use coupons, up five share points from the previous year; 76% use coupons regularly;

- Average face value of CPG coupons offered increased to $1.29 -- up nearly 5% from 2007;

- Overall, the average coupon expiration of 2.5 months remained flat from the previous year; and

- Coupon redemption volume is growing by double digits in non-traditional supermarket channels such as mass merchandisers, dollar stores and drug store chains.




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