You can’t use manufacturer’s coupons at Costco. But you can use the store coupons they send in the mail every month – if they ever get around to sending them, that is. And if any of the coupons are even worth using.
Costco earned headlines last week for announcing a hike in its annual membership fees – beginning June 1, a standard Gold Star Membership will cost $60 a year, up from $55, and an Executive Membership will increase to $120, up from $110.
But with that development dominating, what got somewhat lost in the shuffle was Costco’s acknowledgement of what many members have noticed the past couple of months – the mailed coupon books are becoming fewer and further between, with fewer offers in them. And that’s no accident.
It used to be there was almost always a valid set of coupons available. There might be a few days in between booklets, after the old one expired and the new one took effect.
But that changed at the end of last year. The December book for Costco’s U.S. stores expired on the 24th, and the next one didn’t begin until January 5th – a nearly two-week period with no valid coupon offers. The January book expired on the 29th, and the next one didn’t start until February 16th – a two-and-a-half week break. That book expires this Sunday, and it could be April before another one comes along to take its place. (Update: The new coupon book will begin March 23, eleven days after the previous one expired.)
Costco calls the coupon books “multi-vendor mailers”, or MVMs. “The MVMs have grown and evolved over 22 years, from one six-week summer coupon booklet back in 1995, to generally year-round promotional price pieces with great values on items being offered in each mailer,” Costco Chief Financial Officer Richard Galanti said on a conference call with investors. But “more recently, we’ve revamped the MVM program.”
Those “revamps” include eliminating a few coupon books during the course of the year, running them for fewer days, and reducing the number of items in each booklet. During the most recent financial quarter that ended in mid-February, there were 17 fewer days with valid coupon offers compared to the same time last year, and 71 fewer coupons in the booklets themselves.
Galanti acknowledged that cutting back on coupons “probably hurt traffic a little,” but “overall, so far, we like what we see.”
Many Costco fans don’t, however. Some have taken to the fan site “Costco Insider“, which keeps track of Costco coupons and deals, to vent.
“Wait a second, this is the whole coupon booklet?” one commenter wrote. “I cannot find a single item I would like to buy,” added another. “Got this in the mail on Friday and promptly threw it in the trash. Absolutely terrible!” a third commented.
Costco says the move away from coupons is part of a broader shift from promotional pricing, to lower everyday pricing. Even without a coupon, Galanti said, “I don’t know where else you can get in the country a 40-pack of half-liter water bottles for $2.99, down from $3.49.”
But Costco insists it isn’t giving up on coupons altogether. “We aren’t going from all this way to all another way. It’s a transition,” Galanti said. “It’s not like, oh my God, something’s changed… we think the MVM has a lot of continued potential for us.”
Curiously enough, the new coupon strategy was even cited as a contributing factor to the membership fee increase. “In the MVM, what we’ve done is basically gone out to vendors and worked with them,” Galanti said. “The goal for us, and them, is to drive sales. Basically, it’s a better value to the member, which means it’s a little more expensive both for the vendor and us.”
It’s expensive to lower prices, after all. So essentially, Costco has to charge you more now, in order to charge you less later.
Make sense? Welcome to the world of warehouse shopping, then, where you have to spend money to save money. At Costco, from now on, you’ll just have to get used to doing it with fewer coupons.
