In The News

From The Oregonian (Portland, OR):

Retailers ramp up ‘senior discounts’
By Laura Gunderson

The Hollywood Grocery Outlet's monthly 10 percent discount for shoppers 55 and older keeps Kathy Sakaguchi coming back—both on the deal day and for small weekly trips. It didn't hurt she also won an additional $10 off her bill during the deal day's regular Bingo game. "That's just a real nice surprise," she says.  "And the senior discount encourages us to go back on that Wednesday."

Growing older may be growing lucrative.

Grocers and other retailers nationwide are resurrecting, revamping or simply promoting more heavily discounts aimed at senior citizens, yet the folks lining up for these cuts of 10, 15 and even 20 percent aren't exactly the frail oldsters on fixed incomes some might imagine.

Many deals trickle down demographically to baby boomers starting at age 50.

Retail experts say that such discounts have been around since the 1950s and may cement loyalty among older shoppers and help stores seem "senior friendly." Yet younger shoppers, who often have larger households and spend more on groceries, say they'd appreciate such sweeping discounts, as many of them are on fixed incomes, too.

"When I hear 'senior discounts,' I think of my grandparents. But I realized recently, 'Wait, that's my parents," said Angela Davis, a stay−at−home mom who writes FrugalLivingNW.com. Hers is a popular site locally in a growing niche known as Mommy Blogs that exchange information on how to cut grocery budgets and save money.

"These days, many people in that older age group are still working −− it just seems different now," she said. "Clearly stores are willing to sacrifice 10 percent on purchases to get those people in the store. What about 10 percent to motivate me?"

Although no one can point to it in a history book, collective wisdom says senior discounts originated around 60 years ago, when the AARP began soliciting age−based discounts from insurance companies and hotels. Retailers were quick to sign on.

Fred Meyer has sprinkled occasional senior discount days throughout its mix of promotions for years. The 10 percent discount, which is applied to everything but groceries, was ramped up over the holidays and offered weekly. Starting in February, the Kroger Co. retailer will offer the deal for shoppers 55 and older on the first Tuesday of each month.

Such deals run the gamut in local grocers. Grocery Outlet offers one a month −− celebrated at its Hollywood store in Northeast Portland with a storewide game of Bingo −− while New Seasons Market offers one weekly and Food Front, a local cooperative chain, runs one daily until 2 p.m.

"It's just a good thing for these seniors and they're always so thankful," said Jill Reilly, owner of the Hollywood Grocery Outlet store and another in Gresham. She started the deal at the Hollywood store when it opened in 2008 and never ran promotions.

"It's just been a word of mouth thing and started out pretty slow," she said. "But in the past six months, it's really caught on. Now it's just crazy on that day."

Some stores have moved beyond seniors. Along with its 65−and−older deal, New Seasons provides a 10 percent discount to members of the military. Uwajimaya, the Asian goods chain with a Beaverton store, offers a senior discount along with a 10−percent−off deal for college students.

Kmart offers special discounts to a wide age range. In September, the discounter expanded a program launched last summer giving unemployed customers 20 percent off all private−label goods. Shoppers, who must show proof of enrollment in state unemployment programs, receive a coupon that's good for six months −− though not for sale items.

"The environment these days is just so promotional that people are pulling out all the stops to try to break through the clutter," said Jim Hertel, managing partner at Willard Bishop, a food retail consultant based in Barrington, Ill.  In the past, he said, shopper loyalty was rather easy to come by −− sometimes based solely on how close a shopper lived to a store. Next came the quality of a grocer's meats and produce.

Today, shoppers can buy eggs and milk at a gas station and pick up toilet paper and dish detergent at the Target where they stopped for printer ink cartridges. Retailers end up fighting, in some cases, for loyalties to one category −− say, Costco might be the place a shopper buys all cleaning supplies and paper products, while a specialty grocer, such as Zupan's or Whole Foods, is where they grab imported cheeses and meats.

Yet in the average twice−a−week trips to the store, U.S. grocers aim to grab as much business as they can. For households without kids, the average weekly grocery bill last year was $88.30, according to a 2009 Food Marketing Institute report. Add in children and it jumps 35 percent, to $119.30.

"The sweet spot," Hertel said, "is the mom with the kids in the middle−income brackets. They've got significant food expenditures and don't have enough extra money −− like some older shoppers −− to have alternatives, like going out to dinner."

That sums up the vast majority of the 4,000 or so daily readers of Davis' blog, FrugalLivingNW.com. And that age group's importance −− and Davis and other bloggers direct link to them −− isn't lost on grocers. Chains court mommy bloggers, hoping to earn positive write−ups.

Several mommy bloggers were recently invited to a local Albertson's for a tour and treats, while its sister chain Save−A−Lot, sent out $15 gift cards to bloggers it hoped would visit and do reviews. Safeway sent Davis a $250 gift card when it launched a campaign late last year to promote a raft of storewide price reductions.

"We'll get e−mails telling us about stores' online communities and recipes, and I think, 'Don't you realize this is meaningless to me?'," Davis said. "It's not going to compel me or my readers into your store. What will is really good promotions. If you don't offer that, we won't be coming back."
Sentiments like that have convinced retail watcher Jarrett Paschel that regular one−day discounts −− even if offered to younger people −− wouldn't do much to foster loyalty.

"Say you offer 20 percent off on a Monday, it's a rational response for someone to go shopping there but it doesn't make them feel good," said Paschel, vice president of strategy and innovation for The Hartman Group, a Bellevue, Wash−based food retailing researcher.

"Imagine a scenario where you go into a Safeway and they hand out a free pizza," he said, "That seems to generate a better feeling and loyalty."

Grocers should offer low prices and surprise customers, he said, like the hospitality industry or airlines, where club members jump ahead in security lines. He joined a certain hotel chain's loyalty program, he said, and during a second stay, received a box of chocolates, discount drink coupons and a handwritten thank you.

Instead, current discount programs encourage shoppers to skip from one store to the next, swooping into each store strictly for the week's best prices, double−coupons deals or buy−one−get−one−free offer.

"Any retailer in the world can cut prices, they've been doing that for 50 years," he said. "It encourages a population of bottom feeders that raid stores for the best bargains. But what is it doing for loyalty?"

Back