Major Grocery Brand Pledges 20% More Couponing

Tired of paying full price for cereal? A major grocery brand that’s been a laggard lately in offering coupons and promotions is reversing course, and promising to step up the deals in the back half of this year.

General Mills has announced a plan to boost sales growth “by delivering remarkable consumer experiences,” including new and improved products, more value and convenience – and more coupons.

“We plan to increase our coupon spend by more than 20%,” General Mills CEO Jeff Harmening told investors yesterday.

With supply chains normalizing and inflation causing grocery shoppers to be choosier, promotions have been on the rise. But among grocery manufacturers, General Mills’s announcement is the most explicit so far, in signaling a return to an increased level of couponing.

“The fact is that inflation has been higher for longer than many people assumed it would be… so the job to do is create more value for our consumers,” Harmening said. “There are a lot of ways that we can add value, variety packs, things like that, but also we’re increasing our couponing.”

That represents a strategic shift from less than a year ago. According to the investment firm Piper Sandler, 36% of grocery food products in pre-pandemic 2019 were sold on some type of promotion, whether an in-store sale or a coupon. Last year, that percentage was a below-average 31%, and General Mills was behind most of the industry, with just 27% of its products sold on promotion.

But in General Mills’s fiscal year that’s just ended, “our overall competitiveness fell short of our expectations,” Harmening told investors. Sales last quarter fell 6% compared to this time last year, amid lower demand for General Mills’s products. Among the company’s competitors, “promotional spending is up, frequency is up a little bit, depth of discount is up a little bit relative to the year before,” Harmening noted. “If you look before the pandemic, it’s kind of back to that level of promotional intensity.”

So bring on the coupons! But, it’s important to note, this isn’t 2019. Back then, General Mills was one of the most visible advertisers in the Sunday coupon inserts, with frequent print-at-home coupon offers as well. A couple of years ago, though, that changed.

“General Mills has made a strategic decision to shift to more digital offers,” the company told Coupons in the News in 2022, after pulling back on most forms of paper coupons. “Consumers can still find the value they know and expect through a variety of digital outlets,” ranging from retailers’ digital coupon galleries to savings apps like Ibotta and Fetch.

So don’t pull out your scissors in the hopes of finding the additional coupons that General Mills is promising. Instead, the company plans more digital offers targeted to specific shoppers.

“Because we have a lot of first-party data, which differentiates us from many other manufacturers, we can target effectively,” Harmening said. “Not every manufacturer can do that. But we have the ability to do that, so we’re increasing our coupon spending. And we have the research that tells us that it’s highly effective when we do that.”

According to figures from Inmar, the number of coupons available last year sunk to the lowest level in decades – but the number of coupons redeemed increased for the first time in a dozen years. So that would appear to show that inflation-weary shoppers are hungry for deals, even when those deals are harder to find.

And with shoppers cutting back or switching to store brands, manufacturers like General Mills are hungry for sales growth. So in the months ahead, “our focus will be on ensuring our brands deliver the right combination of great taste, health, convenience, and trust – all at the right price,” Harmening pledged.

And that’s even if the “right price” isn’t “full price” anymore.

Image source: Jeepers Media