It’s week two of a first-in-the-nation ban on digital-only discounts – and week two of many of those discounts disappearing for tens of thousands of shoppers.
Albertsons, which also owns Vons and Pavilions, is the largest grocery retailer in the city of San Diego. And it appears to be having a tougher time than most, figuring out how to comply with the city’s new ordinance that requires grocers to offer non-digital alternatives to digital-only discounts.
When that ordinance took effect last week, the new Albertsons/Vons weekly circulars published inside and outside the San Diego city limits had subtle differences, as do the newest weekly ads published yesterday. Most of the advertised digital-only promotional prices, available only to shoppers who first download a digital coupon, have been replaced in San Diego stores with bar-coded coupons that can be cut out of the circular and scanned at the register (as pictured above). Only a handful of advertised digital deals are not available in paper form.
But it turns out that hundreds of unadvertised digital deals are not available, either. The Albertsons, Vons and Pavilions digital coupon galleries in the city have been gutted – while shoppers outside the city have more than 400 digital coupons to choose from, San Diegans have only 40.
Other grocery chains with stores in San Diego, like Kroger-owned Ralphs, Target, Smart & Final and Stater Bros., have come up with their own methods of providing in-store alternatives to advertised digital-only deals. But none of them has made any changes to their digital coupon galleries – the digital coupons that their San Diego shoppers see are the same ones offered to shoppers outside the city limits.
That’s in line with what the ordinance’s sponsor insisted was the intent of the measure. When the first version of the ordinance passed back in March, the language was vague. It required in-store alternatives to any “digital discounts,” which some suggested could also encompass digital coupons. But San Diego city Councilmember Sean Elo-Rivera said the intent was to regulate only advertised digital-only deals. “It does not regulate websites or apps,” he told Coupons in the News. “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.”
When the final version of the ordinance was passed and signed into law, the language was changed to “publicly available digital discounts,” and a clarification was added, stating that the intent was not “to prevent consumers from engaging with grocery store loyalty and rewards programs.” Most interpreted this to mean it applied to publicly advertised digital discounts, and not to the additional digital coupons available in store loyalty programs.
At least that’s how most San Diego grocery stores have interpreted it. Albertsons seems to be interpreting it differently.
“We have updated our weekly ads,” an Albertsons spokesperson said in a statement last week. “However, because many of the coupons offered through our app are offered by manufacturers, and because many manufacturers have not provided an in-store alternative, we have been forced to remove those offers from our digital app in our San Diego City stores to ensure parity for in-store customers.”
By that logic, the digital coupons that remain in the app but are not in the weekly circular should also be available via “in-store alternative” methods – but Albertsons has not explained how or whether those who don’t clip the digital coupons themselves can redeem them.
Elo-Rivera, in a joint statement with ordinance co-sponsor Marni von Wilpert, criticized Albertsons’ move last week. “We recognize that some stores have chosen to remove digital discounts instead of offering in-store options. That decision is not required and is, instead, a choice that undermines the intent to expand, not eliminate, access to savings,” they said. “We look forward to seeing all retailers — including Albertsons, Vons, and Pavilions — follow the lead of other grocers honoring the spirit of this law and supporting their customers.”
At least some Albertsons shoppers are skeptical about the retailer’s explanation for its lack of digital coupons in the city. “These notices are just rage bait to convince us to pitch a fit and make the city reverse its new rule,” one Reddit commenter wrote.
An added wrinkle is that not even all of the advertised digital-only deals available outside of San Diego, are available inside the city, either. Of the roughly two dozen digital deals available outside the city limits in last week’s circular, a handful of digital coupons and their paper alternatives worth a total of $10.50 were not available inside the city, for Tide, Gain, Downy and Bounce – all Procter & Gamble brands.
The new weekly ad that began yesterday features a new batch of digital deals. This time, San Diego’s version includes a clippable paper coupon equivalent of a Tide digital coupon, but is missing digital deals worth a total of $14 for Downy, Bounce, Febreze and Swiffer – all Procter & Gamble brands.
So it appears that P&G is the one manufacturer not allowing Albertsons to offer clippable versions of all of its digital offers. “While some of our brands may not be in the Albertsons circular,” a P&G spokesperson told Coupons in the News, “we do have brands such as Puffs, Bounty, and Charmin included. This will likely vary from week to week. We continue to work closely with our retail partners as they determine how best to comply with the ordinance in a way that serves their shoppers. How this plays out may differ over time and by retailer. We are committed to continuing to ensure P&G’s superior products are a great value for consumers.”
And yet, getting all manufacturers to agree to provide paper versions of their digital coupons is apparently super simple, according to one retail analyst. It’s “as easy as picking up the phone and calling corporate merchandisers and printers,” Burt Flickinger, managing director of the retail finance consulting firm Strategic Resource Group, claimed to the San Diego Union-Tribune. “There’s no manufacturer anywhere that’s going to turn this down.”
Easier said than done, apparently, as not only are one manufacturer’s clippable coupons missing from Albertsons’ San Diego circulars, but many more manufacturers’ digital coupons are missing from Albertsons’ website and app for San Diego shoppers. And that’s exactly what some industry critics warned might happen, if the ordinance passed as worded. “These issues will make the easiest path to compliance for a grocer to not offer or accept coupons in the City of San Diego,” the California Grocers Association’s Tim James warned city council members back in April.
Elo-Rivera later dismissed that warning. “When they said things like, we’re just going to take coupons away, that was a threat,” he said after the final version of the ordinance passed.
But that comment doesn’t necessarily clear up any ambiguities. The final version of the ordinance “appears aimed at advertised digital discounts,” Coupons in the News reported back in July. “But, as written, the ordinance could still be read as applying to all digital coupons available in a grocery store’s loyalty program, raising the prospect that stores would have to come up with a way for all shoppers to access those deals without requiring them to go online to clip them.”
The California Grocers Association chose to interpret the ordinance as more narrowly tailored. “The updated ordinance will allow California grocers to continue offering the digital coupons customers count on to save money at the store while adding new methods to better support shoppers who might not be comfortable with or have access to technology,” CGA spokesperson Nate Rose told Coupons in the News, after the final version was passed.
Elo-Rivera’s office has been contacted about whether Albertsons’ strict interpretation of the ordinance is correct, or if everyone else’s is, and whether there might be any need for the measure to be amended or clarified to make its intent more clear. And Albertsons has been contacted about why it chose the more restrictive approach to compliance, when other retailers have retained their full selection of digital coupon offers. Neither has yet weighed in.
Other states and cities have already looked at the possibility of passing their own digital deal legislation, modeled on San Diego’s. After a nearly yearlong debate in the city, the San Diego ordinance’s official enactment last week seemed to be the end of the story. But with lingering confusion over compliance and unintended consequences, it turns out that may have been just the beginning.
