Safeway is doing its best to eliminate print advertising in favor of more personalized digital ads.
Safeway Envisions Future Without Print Ads
The fifth largest grocery player in North America spent $20 million on newspaper ads through November of 2012. That's consistent with 2011, though a big drop off from the $33 million spent on newspaper ads in 2010.
"As people become more digital, there's an opportunity, which we're working hard at, [to] actually get out of the paper ads and make the ad itself personalized for every household," said Chairman-CEO Steve Burd during a fourth quarter earnings call with analysts.
Mr. Burd highlighted the retailer's digital Just for U Program, an online loyalty program offering digital coupons and personalized deals. The program now counts 5.4 million U.S. households, or 45% of Safeway's sales base. That number could reach 55% by year's end and ultimately max out at about 65%, Mr. Burd said. Just for U will roll out in Canada later this year. Safeway operates nearly 1,700 stores in the U.S. and Canada and reported $44.2 billion in annual sales.
"We've been surprised at the amount of digital coupons that people are accessing on the web site," said Robert Edwards, president of Safeway, noting that's been a "very positive" feature of the Just for U program.
Still, print and free-standing newspaper inserts continue to dominate coupon media, even as digital coupons gain in popularity. Kantar Media found a 46% increase in digital coupon events by consumer packaged goods companies last year, with the trend accelerating as the year progressed.