Dive Brief:
- The city council for San Diego, California, on Monday unanimously passed an ordinance requiring grocers that offer digital discounts or coupons to make corresponding paper coupons and pricing of identical value available to consumers.
- “[T]he ordinance takes aim at the growing trend where major chains hide discounts behind digital walls, making it harder for seniors, low-income families, and those without reliable digital access to afford basic necessities,” Councilmember Sean Elo-Rivera, who helped spearhead the ordinance, said in a statement on social media.
- The city’s ban on digital-only deals comes at a time when grocers are grappling with how to reach price-sensitive consumers amid ongoing concerns about the cost of food.
Dive Insight:
The policy in San Diego is reportedly the first of its kind in the U.S. It follows similar attempts in New Jersey, Washington state, Illinois and Massachusetts, the office of Joe LaCava, the city council’s president, noted in a February post.
During a trip to an unidentified grocery store, Elo-Rivera said in an Instagram post that the digital deals on “basics” — cereal, yogurt, bread, cheese and beer — totaled more in savings than other deals listed.
“If you put yourself in the situation of someone who either doesn’t know how to use the [grocer’s] app or uses the app right and then the store just doesn’t apply the discount, it’s a $20 difference with just one trip to the grocery store,” Elo-Rivera said in the video.
In San Diego, 53,000 households don’t have home internet, and in low-income areas or vulnerable communities, over 28% of households don’t have broadband internet access, according to the city, which cited the American Community Survey 2014-2018.
AARP California supported the ordinance, saying in a statement that it is “a vital step in promoting the financial security of older adults and vulnerable populations.”
The California Grocers Association told CBS 8 that the ordinance would “actually reduce access to discounts for San Diegans, not expand it” and claimed that the proposal would make “special offerings like loyalty programs — which fairly reward a store’s best customers — unworkable.”
“The real purpose of coupons for the food industry is to introduce individuals to new products, whatever they may be, as well as also reward them for the previous shopping experience. Very rarely are coupons intended to reduce consumers’ costs,” said Tim James, the California Grocers Association’s director of local government relations and enterprise risk, according to The Times of San Diego.
The council approved the ordinance with an amendment that gives grocers 90 days to comply with the new regulations, the news outlet also reported, noting that the ordinance must go through a second reading that will take place in April.
Grocers have already felt pressure from consumers and advocacy groups to do away with digital-only deals.
At the end of 2022, a coalition of consumer rights and public interest groups called on supermarkets to rethink digital-only deals, claiming that they disadvantage “tens of millions” of customers who don’t have internet access or who are not tech-savvy.
Some grocers have taken steps to make digital-only deals more accessible to shoppers. In 2023, Kroger started offering online deals to in-store shoppers via in-lane printers in a partnership between shopper intelligence firm Catalina and the grocer’s data analytics unit 84.51°. At the end of last year, Stop & Shop unveiled plans for a chainwide rollout of in-store kiosks that allow customers to activate digital deals and personalized offers without needing to use a smartphone or computer, noting the initiative aims to “bridge the digital divide.”
