Correction to This Article
This article incorrectly said that some retailers are banding together to offer one another's coupons on their Web sites. It is manufacturers that are doing so.

Snipping, Clipping, Scrimping

By Nancy Trejos
Washington Post Staff Writer
Sunday, October 26, 2008

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 Northwest 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 are not only offering more coupons, but they're also experimenting with creative ways to deliver them, such as text-messaging them to cellphones. 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, has three sons, aged 14, 12 and 8. "Our grocery bill has gone up, especially since my 14-year-old started playing football," she said.

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