A headline in some editions of yesterday's Washington Post implied that Giant supermarket might try to reject some discount coupons. In fact, Giant has discontinued its 30-cent-off milk coupons and is engaged in a campaign to eliminate other discount coupons. But the supermarket chain still accepts regular discount coupons.
In 1895, when C. W. Post offered discount coupons worth one cent toward the purchase of Grape Nut Flakes, marketing manages probably had little idea that they were creating an American institution.
Today, food manufacturers and retailers distribute more than 80 billion discount coupons each year -- more than 300 for every man, woman and child in the United States. Consumers clip and carry them to the grocery store to reduce food bills. Professional collectors write about them in newsletters, magazines and books. And food companies use them as advertising bait, to lure new customers and keep old ones loyal.
But now a Washington-area supermarket chain, Giant Food Inc., wants to do away with the discount coupons, and has declared war on them, contending that the handy, clippable slips are actually costing consumers money.
Steps taken so far in the Giant campaign include:
Elimination of the popular 30-cents-off coupon on milk. Both Giant and Safeway, which together ring up about 6 percent of the food sales in the Washington area, have stopped giving these coupons. (The chains lowered milk prices 16 to 20 cents a gallon when they dropped the 30-cent discount coupons.)
Discontinuation of discount coupons on Giant brand products. Safeway so far still has coupons available on house brands, but a spokesman said yesterday, "We are by no means locked to the couponing . . . "
Publication of a brochure and production of a 20-minute film for the national food industry meeting in Dallas last month that advocated an end to coupons.
Giant officials contend that coupon distribution and handling -- including the abuse by dishonest consumers -- add hundreds of millions of dollars to product costs nationally that are then passed on directly to consumers.
Most food manufacturers disagree and want to retain the coupons, noting that they provide substantial advertising and marketing benefits.
Critics of the coupon abolition movement note that Giant and Safeway have near monopolies in the Washington area and accordingly aren't that interested in one of the primary benefits of the coupons -- attracting customers into their stores.
In addition, these critics note that the coupons don't fit into the computerized and automated ideal of the efficient supermarket chain operation that stresses uniformity and speed.
Giant's drive to do away with discount coupons got a boost yesterday when Esther Peterson, the White House consumer affairs director and former Giant consumer official, urged a group of 40 food executives to reduce coupon distribution.
The food executives, who had been asked to the White House to discuss inflation with President Carter, seemed noncommittal on the question.
A spokesman for Procter and Gamble, one of the largest coupon distributors, said that the first would continue issuing coupons. They ultimately lower prices because it provides us with a [higher] volume of business," he said.
The Gregory Manufacturers Association has a "simple position" favoring coupons, according to Paul Kelly, vice president of marketing.
"Our assessment of coupons is that they are good for consumers; they offer a savings on a product that the consumer wants at a time and place of (his or her) choosing," Kelly said.
The Giant coupon proposal was sharply criticized by coupon magazine publishers, who have made a business out of coupon clipping. Martin Sloane, who puts out a monthly coupon magazine, described the Giant campaign as "misguided" with no chance of success.
Shoppers interviewed at several supermarkets yesterday expressed some emotional attachment to the coupons that several said they could remember from their childhood.
Others voiced suspicion that the savings from the elimination of the coupons might not be passed on to the consumer.
Some were philosophic about the coupon changes.
"I collect them and bring them to the store to redeem," said Susan Haber Silverman, as she balanced 11-month-old Nicki in one arm and guided a shopping cart holding groceries and 3-year-old Julie with her free hand. But, Silverman added, the elimination of coupons also might simplify her life. "Because they are there, I feel compelled to clip them. If there weren't any, it might be easier for me."
Industry surveys of consumer feeling about coupons indicate that their popularity has grown dramatically in recent years with rising inflation. About 70 percent of the shoppers interviewed for one supermarket trend study said they were making more use of coupons today in an attempt to reduce their overall grocery costs.
"Eliminate coupons? If Giant did that, I probably would shop at Safeway," said Jacquie Heye, as she placed a bag of groceries inside her car at the Giant supermarket at Lee Highway and Spout Run in Arlington.
Other shoppers leaving the store yesterday morning expressed disappointment in the discontinuation of the milk coupons and concern that the practice would spread.
"I noticed the milk coupon had stopped," said Lisa Take of Arlington. "And even though it was a small amount of money, it was enough to pay for washing a load of clothes."
Giant's other arguments against coupons include:
Discrimination. Giant said coupons aren't available to low-income consumers who don't buy many newspapers and magazines that publish the offers. Coupon advocates said, however, that coupons are to more discriminatory than food page advertising. "If you prohibit coupons, why not prohibit food advertising -- it makes as much sense," said Sloane.
Misleading savings, Giant said that the consumer often saves more money by buying its house brands instead of the national brand even after cashing in the discount coupon on that product. Sloane, while acknowledging that the house brands often do cost less, said that consumers can save on many national brands when they use coupons.
Handling costs. Giant, which has tried to build an image as an efficient, modern company with speedy computer checkouts, said that coupons slow down checkout lines and cost more to handle than the average 7-cent reimbursement allowed by food producers. This 7 cents is in addition to the reimbursement that the store gets for the coupon's face value.
Sloane disagrees and says that coupon handling costs add less than a fraction of a penny to the price of a product.