The countdown clock has officially begun. Grocery stores in the city of San Diego have until July 29th to ensure that digital-only deals are available in paper coupon form – or they’ll have to pay the price, in the form of hefty fines.
The city’s mayor, Todd Gloria, has signed an ordinance that was passed unanimously by the City Council last month. His signature represents the measure’s official passage, and starts the clock on the 90-day period before the ordinance goes on the books and grocery retailers need to come into compliance.
It just remains unclear exactly how – short of printing, handling and processing thousands of paper coupons, or eliminating their digital coupon programs altogether – grocers actually can come into compliance.
Three weeks ago, City Council members all voted in favor of the Grocery Pricing Transparency Ordinance, the first measure of its kind in the nation requiring grocery stores to offer physical alternatives to digital discounts. The idea is to benefit shoppers who do not have their own digital devices or the digital proficiency necessary to access deals that can only be activated online or through a smartphone app.
“Any grocery store that offers digital discounts to consumers for the purchase of goods must make physical coupons for the digital price available to consumers upon request,” the ordinance reads. “The digital discount price must be clearly shown where goods are displayed or on each individual item offered for sale.” Stores must also post signs advising shoppers of the ordinance and their “right to equal discounts.”
Despite concerns from the grocery industry, and promises by council members to consider those concerns and make changes to the ordinance, its phrasing so far remains unchanged from its first reading six weeks ago. And if the city doesn’t follow through with making any modifications, the measure could take effect this summer as-is.
That’s concerning to grocers because of how the ordinance defines a “digital discount,” as “a store coupon, rebate or similar instrument” offered exclusively through “electronic means.” As written, that would appear to apply not narrowly to advertised digital deals, but to all forms of savings offered digitally – including, potentially, digital manufacturer’s coupons offered by a store. And offering paper versions of every digital coupon, on demand, at all times, not to mention installing shelf tags displaying an after-coupon price for every applicable product, is likely to be so difficult as to be impossible.
The sponsors of the ordinance acknowledged these concerns before passing the measure last month. But as the countdown clock keeps ticking, they have yet to make any modifications.
The intent of the ordinance is not to “regulate websites or apps,” city councilmember Sean Elo-Rivera told Coupons in the News shortly after his measure earned preliminary approval. “It simply ensures that if a digital discount is advertised in-store or in a weekly ad, it must also be available in a non-digital format.”
That may be the intent, but it’s not what the ordinance currently says. Before the final vote last month, Elo-Rivera insisted that “we’ve been extremely clear about the intent of this policy.” But “I’m looking forward to cleaning up ambiguity,” he added. “I want our policies to be as clear as possible.”
“I’m fully committed to making sure, before it goes into effect, we will make the changes necessary,” ordinance cosponsor Marni von Wilpert echoed. “I’ve heard from folks about the definition of digital discount, needing to differentiate between manufacturer coupons and grocery store coupons. We’re happy to work on that… Same thing with the physical coupon requirement. Heard, understood. The intent of the ordinance is to get people access to the coupons. It does not need to be in print. Happy to amend that before it goes into effect as well.”
That’s a lot of amendments and a lot of ambiguities, for a measure that’s already been passed and signed into law.
“These issues will make the easiest path to compliance to not offer or accept coupons or loyalty programs within the city,” California Grocers Association representative Tim James warned council members. “Without adjustments, which we believe are consistent with the intent of the policy, this ordinance will unfortunately do more harm than good.”
Before the measure passed, several retailers doing business in the city complained that they had not been informed about the ordinance or involved in discussions about it. “As a grocer serving San Diego, we have not been consulted on this issue up to this point,” a letter from a Kroger representative to the City Council read – about five months after the measure was first proposed and was subsequently discussed in two public hearings, all of which were widely covered by local and national news media.
“The idea that we did not welcome feedback, I’m not going to continue to hear that,” Elo-Rivera chided retailers last month, before the final vote.
When asked to weigh in publicly about the ordinance, their suggested revisions, and how they intend to comply should the measure take effect as-is, representatives for grocers and other retailers doing business in the city – 99 Ranch Market, Jensen’s, Northgate Market, Carnival Supermarket, Stater Bros., Sprouts, Smart & Final, Ralphs, Food 4 Less, Albertsons, Vons, Pavilions, Dollar Tree, Target and Walgreens – did not respond to requests for comment. CVS deferred to the California Retailers Association, which, along with the California Grocers Association, also did not respond to requests for comment about their plans going forward.
For retailers complaining that their voices aren’t being heard, they’re all being awfully quiet when given the opportunity to speak out. So it remains unclear the extent to which there are active discussions about potential revisions to the ordinance. Elo-Rivera’s conciliatory remarks in council chambers came in stark contrast to what he told constituents beforehand. “Corporations are freaking out” about the ordinance, he said in a social media video. “They’re trying to water it down ahead of Tuesday’s vote… Do not let the corporations win.”
That tough talk is what helped the measure get national attention, and helped it get passed. The conciliatory talk came only after grocery industry representatives objected at the eleventh hour, warning of the unintended consequences should the ordinance take effect as-is.
So there’s still time for changes to be made. The question is what changes, if any, will be agreed to. And with less than three months to go before the ordinance otherwise takes effect as written – the clock is ticking.
File image source: San Diego Mayor’s Office
