Kroger Cashes in Without Double Coupons

For every Kroger shopper who’s vowed never to return to a store that’s ended double coupons, it appears there are many more people who are happy to keep on Krogering. In its newest quarterly earnings report, the supermarket chain said it raked in $317 million in profits this summer.

Must be nice. So how much did you make this summer?

Probably not quite as much – especially if you’re in a region where your coupons don’t even double anymore.

One by one, Kroger divisions across the country have been discontinuing double coupons, and promising new lower prices instead. The Atlanta Division and Mid-South/Louisville Division will become the latest to do so, when they lose their doubles on September 22nd.

Many customers of the double-ditching divisions have howled in protest, and promised to shift their shopping to more coupon-friendly competitors. Others said they didn’t much care for coupons anyway, and were happy about the promise of lower prices. Kroger is betting that pleasing those customers will outweigh the loss of any double coupon fans – and that talk of any large-scale Kroger boycott will prove to be just talk (read: “Good Riddance, Double Coupons: The Silent Majority Speaks Out?”).

In the end, the numbers tell the story. $317 million in profits this past quarter, up 14% from this time last year. $22.7 billion in sales, up 4.6% from this time last year. Identical store sales rose as well, for the 39th consecutive quarter – nearly ten full years. Kroger didn’t break down the numbers by division, so there’s no way to tell how regions that recently eliminated double coupons, have fared against the others.

But overall, Kroger is doing just fine. So when it comes to double coupons – who needs ’em? Certainly not Kroger.

“Overall, customers continue to visit our stores more frequently, purchase fewer items per trip and buy more on a monthly basis,” Kroger Chief Operating Office Rodney McMullen said yesterday. If a significant number of Kroger shoppers are troubled by the end of double coupons, they’re not showing it.

And if Kroger executives are concerned about any backlash from couponers, they’re not showing it either. The subject of coupons came up just once during yesterday’s earnings conference call with investors – and only in response to a softball question served up by an analyst: “Can you talk about how aggressive you are in terms of pushing mobile coupons?” – which Kroger execs gladly answered with the usual platitudes about how customers just love them.

That’s customers, not couponers. Serious couponers tend to be distrustful of digital coupons – they sometimes don’t work, it’s hard to get things fixed if they don’t, and of course, they don’t double. But as Kroger works to make digital coupons dummy-proof, it’s the non-couponers who most appreciate the convenience of not having to clip anything.

And it’s the non-couponers who are in the majority. So pleasing them, with lower prices and easier-to-use coupons, results in more profits – and displeasing double coupon fans is just a small price that Kroger seems willing to pay.

“Customers are telling us that our associates continue to connect with them by showing them that our people are great, our product selection and quality is improving, we are making the shopping experience faster and easier and we continue to give our customers better value for their money,” McMullen said. Kroger’s ongoing investments in better prices, he added, means “customers are saving nearly $3 billion a year compared to when we started this journey.”

That $3 billion figure might be a little higher, if all of Kroger’s divisions still doubled coupons. But then that might mean the $317 million figure – Kroger’s profits – might be a little lower.

Pleasing customers is nice. But in the end, it’s a business – so pleasing the shareholders is what ultimately matters.

Image source: Wikimedia Commons/2bgr8