Talia Holston, left, and daughter Tyra, 11, shop at a Giant Food in Washington, D.C. Talia Holston bought 28 items worth $71.29, but she paid $31.27 using coupons and her store-issued bonus card. - The Washington Post

Tight economy means coupon comeback

Talia Holston used to spend about $150 a week to feed herself and her three children.

Then she started using coupons, trolling the Internet for the best ones. Now, she spends about $200 a month on groceries. She once walked out of a CVS pharmacy having spent $50 for $200 worth of items.

"Sometimes, it really feels like I'm robbing them," the Washington D.C. resident said. "I sometimes feel bad."

That is, until she looks at what stores are charging for food and toiletries these days. "The price of everything seems to be rising," she said. "When you walk out spending half what you would have, that feeling is mind-blowing."

More Americans are trying to get that feeling, consumer behavior experts said. With wages not rising as quickly as the cost of basic necessities, coupons are back in favor after many years of steadily declining popularity, experts said. Eager to lure customers into stores, many merchants not only are offering more coupons, but they're also experimenting with creative ways to deliver them, such as text-messaging them to cell phones. Consumers, meanwhile, are becoming more savvy about finding good deals thanks to Web sites devoted to coupon-clipping strategies.

"Marketers tend to send more coupons or issue more coupons during an economic downturn, and consumers redeem more," said Peter Meyers, vice president of marketing for ICOM Information & Communications, which conducted a survey on coupon usage. "Both are motivated. Marketers want to get more revenues, and consumers are motivated to get more savings."

Coupon usage peaked in 1992, when nearly 8 billion were redeemed for nearly $5 billion in savings, according to CMS, which processes coupon payments for merchants. Usage then started declining at an annual rate of 5 to 7 percent. Last year was the first year it did not decline, with 2.6 billion coupons redeemed for savings of almost $3 billion. Survey organizers said that number could be higher this year, as food prices have climbed at a faster rate than in previous years. According to the Bureau of Labor Statistics, the price of food increased by a seasonally adjusted annual rate of 7.5 percent in the first nine months of the year. For all of 2007, it increased 4.9 percent.

"Were we not in this economy, we probably would be looking at a slight decrease again," said Matthew Tilley, co-chairman of the Promotion Marketing Association's Coupon Council and director of marketing for CMS. "There's definitely an increased interest to use coupons for savings by consumers."

Recent studies have shown that this is just one way people are changing their shopping behavior to stay within tighter budgets. A Booz & Co. survey conducted last month found that people were switching to less-expensive grocery stores, buying more store-label products and making fewer impulse purchases at the cash register.

In a survey of 1,000 people released last month, the Coupon Council found that 89 percent had used coupons when shopping for groceries, household or health-care items.

Experts said they expected coupon usage to grow. Of the 1,529 U.S. consumers surveyed by Toronto-based ICOM this spring, 67 percent said they would be more likely to use coupons during a recession. It didn't matter how old they were. People of all ages — from 18- to 24-year-olds to baby boomers to retirees — said they would turn to coupons.

Dianne Murphy, a 44-year-old resident of Leesburg, Va., has three sons, aged 14, 12 and 8. She plans meals for the entire week and spends part of her Saturdays studying her coupon options. She estimates that she saves about $40 with coupons. "That's something," she said. "I feel like I'm not just leaving money on the table."

Holston, a management analyst for a government contractor who is also studying to get a PhD, started using coupons in January. "I just got to the point where I felt I had to do something to save money," she said.

She found, which sends her a weekly list of the lowest-priced products at her supermarket along with manufacturers' coupons and specials.

Now she has three coupon organizers. When she finds good deals, she buys the items in bulk. Her linen closet, refrigerator and freezer are packed. Sometimes, she has so much that relatives descend upon her home to help themselves to some of her food.

Erin Gifford, 34, has a laundry basket in her Ashburn, Va., home filled with toothpaste, Jell-O and Cheerios that she got free. She always keeps an envelope of coupons in her purse.

She once found a 75-cent coupon for Gum toothbrushes and used it on a double-coupon day at Harris Teeter. The original price of each toothbrush was just $1, so Harris Teeter paid her 50 cents to buy each brush. She bought 20 and donated them to charity because she prefers her electric toothbrush. Along with the toothbrushes, she got two bags of pretzels and two tubs of Edy's ice cream, all for 49 cents.

With three kids and an au pair living in her house, she needs the savings. "Things are much more expensive now. Eggs are up. Milk is up," she said.

But she also admits to simply cherishing the thrill of it all. "It's kind of a game when you find those deals," she said. "When you get that, it's a bonanza."

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