Fry's Food Stores Brings Back 'Competitor Coupon Match' Promotion; Accepting Fresh & Easy Neighborhood Market Coupons in Arizona

Fry's is turning up the heat, touting low prices at its Arizona stores on billboards like the one above in the Phoenix suburb of Chandler, as well as through promotions like its "competitor coupon match" program. The text on the billboard says: "For two years running, retail independent services have ranked Fry's #1 in low prices of traditional grocers in Arizona." Click on the photo to enlarge it.

Metro Phoenix, Arizona Market region
News/Analysis

Kroger Co.-owned Fry's Food Stores didn't wait long to bring back its "competitor take-all" "coupon match" program in the white-hot-competitive metro Phoenix, Arizona food and grocery retailing market.

We last wrote about Fry's extremely successful coupon promotion, in which it accepts the store coupons issued by all of its major competitors, along with doubling the value of all manufacturers' cents-off coupons up to a dollar, in a November 2010 piece - November 19, 2010: Kroger-Owned Fry's Store Coupon Jujitsu Ensnares Tesco-Owned Fresh & Easy Neighborhood Market in Arizona.

Fry's ended the "competitor coupon match" promotion in late December 2010. But the Kroger-owned grocery chain has brought it back for 2011, beginning this week, on January 26, and running until the grocer gives further notice. The promotion is good in all of the grocer's 120-plus Arizona stores. Metro Phoenix, where most of the states residents live, is where the majority of food and grocery dollars are spent in Arizona.

Under the promotion, Fry's is accepting store coupons issued by the following grocery chains doing business in Arizona: Albertsons, Safeway Stores, Bashas', Fresh & Easy Neighborhood Market, Sunflower Farmers Market, Sprouts Farmers Market, Walmart Marketside, Walmart Neighborhood Market, Whole Foods, Target, AJ’s, Trader Joe's, Food City and Pro's Ranch Market.

As we've said in past stories about the Fry's promotion, the default target of the store coupon aspect of the promotion ends up being Tesco's Fresh & Easy Neighborhood Market, because out of all the grocers listed above, its the only chain that issues discount store vouchers on a regular basis. These are the Fresh & Easy $5-off purchases of $20 or more; $6-off-$30; $10-off-$50 and the like store coupons the grocer has in distribution at virtually all times, as we written about extensively in Fresh & Easy Buzz.

If you're skeptical about our analysis that Tesco's Fresh & Easy Neighborhood Market is the default target (meaning the program isn't specifically aimed at Fresh & Easy exclusively but it's the competitor most affected anyway) of Fry's "coupon match" promotion, take a look here.

Additionally, take a look at what Fry's shoppers are saying about the return of the grocery chain's "coupon match" program here and here.

A few of Fry's other major competitors, like Albertsons, Bashas' and Safeway and a couple others, issue store coupons - such as $10-off-$50 and $25-off-$100 versions. But they do so on a sporadic basis, compared to Fresh & Easy's regular use of the discount vouchers. Fry's issues its own store coupons on occasion, such as a $5-off purchases of $35 or more voucher and a $10-off purchases of $100 or more version.

Another reason Fry's promotion targets Tesco's Fresh & Easy most directly, although as we've said that's not the strategy behind it for the Kroger chain, is because the Fresh & Easy neighborhood Market stores don't take manufacturers' cents-off coupons as a matter of policy.

In the program, Fry's Food Stores allows shoppers to combine the use of one of these store coupons, such as a $6-off-$30 voucher from Fresh & Easy, with their manufacturers' coupons, deducting both types from customers' total grocery order purchases at checkout.

For example, suppose mom or dad head off to a Fry's supermarket with a grocery list, a $6-off purchases of $30 or more Fresh & Easy store coupon, and a stack of manufacturers' cents-off coupons, each having a face-value of 50 cents and over.

Once at the store, our grocery shopper then fills his or her cart with an assortment of food and grocery items - ranging from milk and bread, to packaged snacks, household cleaners, breakfast cereals and more.

At the checkout lane our shoppers hands the grocery checker the coupons, then braces herself for the total, as the Fry's clerk scans the items.

The pre-coupon deduction total just so happens to end up being $50, right on the button.

Smiling, the friendly Fry's checker says..."Let me deduct the coupons for you." Scanning each coupon, there are 10, all with a value of 50 cents or higher, our shoppers $50 market basket purchase now drops down to $40. But there's more to come. Lastly, the checker scans the $6-off Fresh & Easy store coupon (the manufacturers' cents-off coupons are deducted first) and announces..."That will be...$34, please.

Not bad, $16 off a total grocery order of $50, thanks to the doubling of the manufacturers' cents-off coupons and the Fresh & Easy $6-off store coupon combination. Fry's allows shoppers to use only one coupon per retailer, per order. However, if a customer has a store coupon from Fresh & Easy, say a $6 off, and one from Albertsons, for example, such as a $10-off-$50 voucher, they can then use both on a single order. Therefore, in our example, the customer order would drop to $24, if he or she used both the Fresh & Easy and Albertsons' store coupons, in this particular example.

Well, we should note that "it's not bad for the shopper." But it's less than good for Fry's gross margin on that particular order and any others like it. Why? The chain gets reimbursed for the face value of the manufacturers' coupons, plus a carrying charge of a few pennies for each coupon, but has to eat the rest of the deduction it gives, up to that dollar, along with eating the entire value of the Fresh & Easy Neighborhood Market store coupon or those from any other competitor.

If Fry's wasn't owned by Kroger, the second-largest retailer of food and groceries in the U.S. after Walmart Stores, it wouldn't be able to sustain such a margin hit. But since Fry's is just one of Kroger's many chains, the mega-retailer can sustain the margin hit better than a smaller chain because it can spread it out over many chains and stores throughout the U.S.

And Fry's, which is the number two market share leader in Arizona after Walmart Stores, Inc., believes the added sales it gains from the coupon promotion in the hyper-competitive metro Phoenix market is worth taking this margin hit. If not, the chain wouldn't have brought the "coupon match" promotion back so soon in 2011, after doing it for more than half of 2010.

Meanwhile, the fact Fry's is accepting store coupons, along with doubling manufactures' cents-off coupons, is a tough nut for Tesco's Fresh & Easy in metro Phoenix, where the grocer has 28 stores, after closing six markets in November of last year.

The deep-discount store coupons are Fresh & Easy's primary promotional tool, in addition to its weekly advertising circular. It issues the vouchers regularly, nearly always having at least one version, and often times two or three versions, in circulation.

Based on our research and reporting - which you can see at the stories linked at the end of this piece - the Arizona Fresh & Easy stores experience a significant drop in sales, which is something Tesco can't afford, whenever Fry's runs its "competitor match" coupon promotion. Further, the fact Fry's kicked-off the promotion on Wednesday without issuing an end-date, could mean the Kroger-owned chain plans to run it non-stop over the next few months, which is something it did in 2010.

If that's the case, which sources tell us it is, the increased competition from the region's number two food retailer, Fry's, comes at a very bad time for Tesco's Fresh & Easy, which not only is trying to grow its same-store-sales considerably, but also must significantly increase its overall margin, which currently sits at a negative-38%.

After California, where Tesco has 107 of its 156 small-format fresh food and grocery stores, metropolitan Phoenix, Arizona has the second-highest number of stores, at 28, followed by 21 units in metro Las Vegas, Nevada.

Although the Arizona store-count is much lower than in California, Tesco needs to grow same-store sales in all of its Fresh & Easy units, not just those in one market region or another. And the more competition, which equals price pressure, means the harder it is for Fresh & Easy to move that gross margin up into the positive sphere.

Metro Phoenix, with Walmart, Kroger, Safeway, Albertsons and Bashas' - the top five in market share (in that order) battling against each other, along with niche players like Sprouts, Sunflower, Whole Foods, Trader Joe's, Fresh & Easy and others doing the same (and with WinCo Foods on the way in 2012) - is already arguably the most-competitive grocery retailing market in the U.S., as we've said in Fresh & Easy Buzz for over three years.

Blazing hot, price-competitive promotions like Fry's "coupon match" just add additional heat to that already burning competition. And because Fry's program is coupon-based, much of that competitive promotional heat is directed at Tesco's Fresh & Easy Neighborhood Market's metro Phoenix, Arizona operations and 28 stores.

Related Stories

January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

November 19, 2010: Kroger-Owned Fry's Store Coupon Jujitsu Ensnares Tesco-Owned Fresh & Easy Neighborhood Market in Arizona

February 3, 2009: Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move

May 20, 2009: Breaking Buzz: Tesco's Fresh & Easy Issues Another New Discount Store Coupon ($10-off $50 Though); We Told You the Coupons Would 'Be Back'

Plus, see (click on) the following links - deep discount coupons, store discount coupons, manufacturers cents off coupons, manufacturers coupons, Fry's Food Stores Arizona, Metro Phoenix Arizona market and Arizona Market Region Report - for additional related stories.

Competitor News & Market Analysis: The Arizona Market Food Retailing 'Canary' Sings Again; Kroger Co.-owned Fry's Supermarkets Lays Off 90 Employees

Arizona Market Region Report: Food & Grocery Retailing in the Recession

Back in June, 2008, Fresh & Easy Buzz suggested in this piece [Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market] that we were seeing the first signs of possible food and grocery retailer layoffs and potential store closings in Arizona with the announcement by Arizona-based Bashas' that it was firing numerous employees at its corporate headquarters.

Last month, the recession and related white hot competition in Arizona struck Bashas' again in the form of more layoffs and the closing of five if its Arizona stores, as we reported on in this February 6, 2009 piece: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market.

Well that food retailing canary made itself heard again just two weeks ago in Arizona. The Kroger Co.-owned 120-store Fry's supermarket chain in the state fired about 90 workers, according to Joe Ellen Lynn, Fry's corporate spokesperson. The layoffs were first reported by the Arizona Republic newspaper on March 13. We varified it with Fry's and other sources.

Fry's employees about 18,000 workers in Arizona, according to the chain.

The Fry's employees appear to have been all from the chain's corporate headquarters because United Food & Commercial Workers union Local 99, which represents Fry's store-level workers in Arizona, says none of its members who work for the supermarket chain have been laid off to date.

Headquarters staff and some other exempt employee positions such as regional field reps and the like are non-union positions.

Retailers, particularly supermarket chains, and especially unionized chains, almost always terminate headquarters and non-direct store-level employees as a first cost-cutting step when such reductions are needed or desired by senior management.

Based on our research, this appears to be what Fry's has done.

Arizona is struggling in the current recession. Unemployment is fast-growing. Residential real estate activity has come to virtually a complete halt. And commercial real estate activity, which was booming just a little over a year ago, is down dramatically.

Arizona also is one of the most competitive food and grocery retailing markets in the U.S., as we've frequently mentioned in Fresh & Easy Buzz.

Mix these two conditions together, the recession and white hot competitive food retailing climate in the state, and something has got to give, an argument we started making about one year ago.

We've seen this give first with Bashas' and now with Fry's.

Additionally, Tesco's Fresh & Easy Neighborhood Market has slowed the opening of a number of new stores in Arizona.

Safeway Stores, Inc. basically isn't planning any new stores in the state beyond those it might already have in the pipeline.

Fry's and Albertsons also are pretty steady-state in terms of new store plans at present in Arizona.

Wal-Mart though remains pretty much on schedule in terms of continuing to open new stores in the state, particularly its combined food and general merchandise mega-Supercenters.

That strategy is paying off for Wal-Mart in the food and grocery sector. The retailer has now grown its way to becoming the number one food-grocery sales market share leader overall in Arizona, but just by a couple hairs, which demonstrates the state's super-competitive market.

Wal-Mart is currently number one with a 24% market share, according to recently published research. Kroger's Fry's is right behind Wal-Mart, with an about 21.5% share. Safeway is third with about 18.5%. And Bashas' is neck-to-neck with Safeway, with Albertsons right in the game. It's the market share version of a win-by-the-neck horse race, in other words.

We first started suggesting slightly over a year ago that the Arizona market, particulary the Phoenix Metropolitan region market where Tesco's Fresh & Easy Neighborhood market has its grocery and fresh foods stores, was getting close to beign overstored. In mid-2008 we began suggesting Arizona was overstored, particulary adding the economic recession into the equation.

It's our analysis that the Bashas' and Fry's layoffs are the result of this retail saturation in the state. The economic recession, which is hitting Arizona like a hammer, is an added factor.

It's likely that if economic times were better, the Bashas' and Fry's layoffs could have been avoided -- maybe. But economic prosperity is never a constant. Therefore, overstoring must always be analyzed based on the economy being an independent rather than dependent variable. Independent variables are those subject to change. Dependent variables are constants.
It's our further analysis that more cutbacks will come among grocers in Arizona. We likely not only will see additional layoffs. but we suspect to see more store closings as well.

For example, Tesco's Fresh & Easy is bleeding cash. The question is how long the grocer is willing to do so. Right now we don't think openingadditional stores in Arizona will do much of anything to solve that situation. Same store sales growth is what's needed.

But since Tesco is moving to a much more price and promotional-focused and value proposition-oriented positioning of its Fresh & Easy stores, it's also at the same time becoming a stronger competitor to the major players like Wal-Mart, Fry's, Safeway, Bashas and Albertsons, as shoppers search all over for good deals. [Read our March 2, 2009 piece here: Fresh & Easy Buzz Redux: Much of the Value Proposition-Based Analysis and Suggestions We've Been Offering Now Being Adopted By Tesco's Fresh & Easy.] That value proposition-based positioning, if done fully and comprehensively, also might be what helps Tesco's Fresh & Easy to bleed far less cash over time.

In Fry's case, its parent company Kroger Co., just reported a solid 8% income gain in its latest quarter just ended two weeks ago.

But Fry's is facing serious competition, as all the others are in Arizona, despite its parent company doing well. This should be another indication about what we mean when we call the Arizona market a white hot one.

As such, we expect to see more shoes drop in the food and grocery retailing sector in Arizona between now and this summer. The recession isn't improving, and even the most optimistic forecast calls for only seeing some demonstrable improvement in the overall U.S. economy by the end of this year. (And remember, Arizona is one of the hardest hit states.)

At the same time, the competition is heating up even more so in the Arizona market region, particularly from an everyday price and price-promotional perspective. When this type of competition in a near or already overstored market happens like it is, something has to give among one or more of the players.

Linkage - Select Related Posts:

>April 1, 2009: Competitor News: Bashas' Chain Launching 10,000-Plus Item Storewide Price Slashing Program This Week in its Arizona Supermarkets

>February 3, 2009: Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move

February 12, 2009: Consumer Use of Manufacturers' 'Cents Off' Coupons Continues to Grow: The Latest American Rage: Home Coupon-Clipping and Coupon-Trading Parties

>March 19, 2009: Ground Control to Shopper: Point-of-Purchase-Based Mobile Couponing the Next Hot Ticket; Kroger Co. Leading the Food Retailing Pack

>December 16, 2008: Food & Grocery Retailing in the Recession: Bashas' Broadening the Shopper-Base in its Hispanic Format Food City Stores; Shoppers Search for Value

>March 11, 2009: Fresh & Easy Buzz Redux: Tesco's Fresh & Easy Changes its Promotional Advertising Flyer to 'Weekly;' Something We've Been Suggesting For About A Year

>February 6, 2009: Arizona Market Region Analysis: Bashas' Worker Layoffs, Closing of Stores Could be the 'Canary in the Coal Mine' in Ultra-Competitive Arizona Market

>December 12, 2008: Fresh & Easy Looking For Gold in Gilbert: Second Store in the Arizona City Set to Open Jan. 7; A Third Fresh & Easy Market to Open In Fall, 2009

>December 12, 2008: Marketing & Promotions Report: Manufacturers' Coupons Becoming the 'New Black;' Use Among Consumers Soaring; Marketers Distributing More Than Before

>October 2, 2008: Arizona Market Report: Fresh & Easy Opens Two New Stores; Marketside Opens in Three Days; Analysis of One Of the Most Competitive Markets in the U.S.

>June 8, 2008: Arizona Region Market Report: First Signs of A Weakening Might Be Starting to Show in the 'White-Hot,' 'Super-Competitive' Arizona Market

>September 15, 2008: Wal-Mart Expanding its Discount Store-to-Supercenter Conversion Program As Part of its Strategy to Grab Even More Food and Grocery Sales Market Share

>September 29, 2008: Special Report: Wal-Mart, Inc. Studying Second Small-Format Food and Grocery Store Concept; the 'Bodega' or Modern Version of the Corner Grocery Store

>August 8, 2008: Analysis & Commentary: Wal-Mart's Marketside As Part Of it's Multi-Format Category-Killer Strategy Spells Trouble For Tesco's Fresh & Easy

>April 14, 2008: New Multi-Supercenter and Multi-Format Strategies Are Showing Wal-Mart to Be A More Agile Grocery Retailer in the U.S.

>November 19, 2008: Competitor News: Wal-Mart Lowering Prices on Holiday Items and Staples; New Formats Coming; Online Grocery Sales; Hundreds of New Stores FY 2009-2010

[You can follow Fresh & Easy Buzz around on Twitter.com at www.twitter.com/freshneasybuzz.]

Competitor News: 'Grocer-Gone-Wild:' Arizona's Fry's and its 'Bring it On' 'Take All Competitors' (Including Tesco's Fresh & Easy) Store Coupon Move

Food-Grocery Retailers and Discount Store Coupons: Arizona Market Region Report

No season of the year is more important to food and grocery retailers than the one that begins about two weeks before the Thanksgiving holiday in November, and runs on through Christmas, right up to New Years. U.S. shoppers buy big at the grocery store during this nearly two month time period, including buying types and varieties of food and grocery products, including higher-end items, they don't buy during the other 10 months of the year. It's a sales bonanza season for grocers.

The fall holiday food retailing season for grocers also is one of the most competitive in the U.S. supermarket industry. That makes sense after all, with shoppers buying so much more for the holidays than normal, each grocery chain wants to be the one that gets the biggest share of that spending. Therefore, the competition is fierce among grocers for shopper dollars in November-December, even more so than it is the rest of the year.

And nowhere in the U.S. was the recently-ended Thanksgiving-Christmas-New Years 2008 food and grocery retailing season more competitive than it was in Southern California, southern Nevada and Arizona, where Tesco's Fresh & Easy Neighborhood Market operates its 110 combination grocery and fresh foods markets.

Among these three states and market regions, the Phoenix, Arizona Metropolitan market region is arguably the most competitive.

For example, The United States' four leading food-grocery retailers (in order of annual sales of food and grocery products) -- Wal-Mart, Costco, Kroger Co. (Fry's and Smith's), Supervalu, Inc. (Albertsons) and Safeway Stores, Inc. -- all have numerous stores in the Arizona market. There's also Arizona-based powerhouse supermarket chain Bashas, which as "the local guy" has about 160 supermarkets in its home state. Then there's Trader Joe's, the popular hybrid natural foods chains Sprouts Farmers Market and Sunflower Farmers Market, natural superstore chain Whole Foods Market, numerous independent supermarkets, many ethnic grocers (the state has about a 40% Hispanic population) -- and of course Tesco's Fresh & Easy, which has over 30 stores in the region, with more on the way.

Store discount coupons and the Arizona market

When it comes to the use of store discount coupons -- like the $5 off purchases of $20 or more, the $6 off of purchases of $30 or more, and now the $10 off purchases of $50 or more that Tesco's Fresh & Easy has used in the Phoenix Metro market since its first stores opened there in the fall of 2007 -- the grocery and fresh foods chain has had that particular market niche (offering the store coupons) mostly to itself.

A couple of the chains in the market sometimes distribute such coupons -- but only as a rare promotional tool. For example, as we wrote in this piece yesterday, Safeway distributed a $10 off purchases of $50 or more store coupon, good for just three days, in its supplemental advertising circular on Super Bowl Sunday. But Fresh & Easy is the King of such discount store coupon distribution in Metro Phoenix, and the only chain that regularly offers the coupons to shoppers.

Fry's 'take all competitors' coupon strategy

However, and we aren't even sure if Tesco is aware of this, But the Kroger Co.-owned Fry's supermarket chain in Arizona mounted what can be best described as a "take all competitors'" strategic store coupon strategy for most of November and December, 2008, as a way to up the anti in the coupon derby in the very competitive Arizona market.

For most of the November and December 2008 holiday selling period, Fry's honored every one of its competitors' store coupons and manufacturers' "chain-specific" "in-ad" and retailer Web site coupons in its stores, including all of the $5 off and $6 off deep-discount store coupons issued by Tesco's Fresh & Easy Neighborhood Market in the Arizona market.

That's right, Fresh & Easy wasn't the only chain, or stores, where shoppers could use the "retailer-specific" $5 off and $6 off store coupons issued by Tesco's Fresh & Easy. Fry's stores welcomed the Fresh & Easy store coupons, along with every other type of coupon from every food retailing competitor in Arizona, during the super-competitive food and grocery retailing months of November and December, 2008.

Instead of issuing its own similar deep discount store coupons, Fry's just said to shoppers -- 'We will take every coupon you have, regardless of which retailer issued it, in our stores.' That's what we mean by a "take all" store coupon strategy. "Bring it on" might also be an apt description of the promotion.

Fry's promoted the "take all competitor coupons" program in its stores, in its weekly advertising circular, and on its Web site in a selective fashion. A number of local consumer-published Blogs that focus on supermarket and manufacturers' coupons in Arizona also mentioned the "Fry's takes all competitors' coupons promotion" in November and December as well.

For example, this is what Arizona coupon maven Stephanie Ashcraft, who publishes her own Blog about Arizona coupon deals, Savvy Savings Tucson, told Fresh & Easy Buzz in December, 2008 about the Fry's "take all competitors'" coupon program: "The first time I went to use one of the Fresh & Easy Neighborhood Market $6 off $30 purchase coupons at Fry's they scanned it and it took off $1.10. I had the cashier look at the coupon and they took off the remaining 4.90 off the order. I've used the coupon several times over the last few months at Frys while they've had this deal running. It's great! I'm able to combine that coupon with all my manufacture coupons which makes this truly a "screaming deal." They take that coupon off first, then deduct all my other coupons."

Ms Ashcraft also appears regularly on Arizona television stations offering her coupon savings tips for Arizona consumers. She mentioned the Fry's "take all competitors'" coupon program during one or more of her TV appearances in November and December, 2008, in addition to posting about it on her Blog.

The popular coupon Web site Pinching Your Pennies.com also posted about the Fry's take all competitors' coupons promotion, which ran until December 30, 2008. This was the entry from Pinching Your Pennies.com for the Fry's program: * "Fry's is Accepting all Competitor Coupons from Albertsons, Bashas, Safeway, Fresh & Easy, Walmart Neighborhood Market, Walmart Marketside, Sunflower Market, Sprouts, Whole Foods, AJ's, Trader Joes, Food City, Ranch Market and others. Extended thru 12/30/08."

Note that in the quote above (in italics) that coupon maven and grocer store penny-pinching expert Stephanie Ashcraft mentions combining the Fresh & Easy store coupons with manufacturers' "cents off" coupons at Fry's in order to save even more money on her purchases. This isn't something shoppers can do at Tesco's Fresh & Easy markets because the grocery chain doesn't accept manufacturers' "cents off" coupons in the stores.

As a result of the program and the various forms of publicity about it in Arizona, Fry's redeemed numerous chain-specific product "cents off" coupons offered by its competitors, and also accepted many of the Fresh & Easy $5 off and $6 off deep-discount store coupons in its Arizona supermarkets in November and December, 2008, accepting the Tesco coupons as if Fry's issued them itself.

Manufacturers, particularly big ones like Proctor & Gamble, General Mills, Kraft and numerous others, work with retailers, especially big chains, to offer "chain or retailer-specific" product "cents off" coupons that are only good at a specific retailer's stores, such as good only at Wal-Mart, Safeway, ect. The chain then runs the coupon in its weekly advertising circular ("in-ad" coupon) and/or on its Web site. The manufacturers' even pay the retailer a hefty fee in return for the grocery chain running the manufacturer's coupon in its paper advertising circulars and on its Web site.

We recently talked to a Fry's executive who said (on condition we not print he or she's name) the chain will do the "take all" competitor coupon promotion again, accepting all competitor coupons, be they special in-ad specific item store coupons from the likes of Safeway, Bashas, Wal-Mart or Albertsons, or the deep discount store coupons offered by Tesco's Fresh & Easy (or any other retailers) -- that up until November and December of last year were good only at a Fresh & Easy Neighborhood Market store in Arizona. Fry's isn't announcing yet when it will do the promotion again, at least not to us or any other publication. But it will do so again. We are rather certain of that fact.

Meanwhile, the strategy of accepting all its competitors' coupons is a powerful one. (Also a potentially expensive one.) In a sense, for whatever period of time a supermarket chain does so, it can render all of its competitors' coupon-oriented promotions much weaker than they would be without such a defensive strategic move by a competing retailer like Fry's. And the bigger the chain (the more market share it has), the weaker it makes the competitors coupon efforts and programs.

Imagine, for example, if two big chains, say Fry's and Safeway, in a market like Arizona both took all competitors' coupons at the same time. That would make such coupon promotions from all the others even weaker, or perhaps make all such offensive moves moot for whatever period of time the two chains accepted the competitor coupons for.

As we said, we aren't sure if Tesco's Fresh & Easy knows, at least until now, that a competitor, Kroger Co.-owned Fry's, was redeeming its $5 off and $6 off store coupons for most of November and December of last year. But many Arizona shoppers knew, as Fry's took in some pretty big stacks of Fresh & Easy Neighborhood Market-issued store coupons during the nearly two month promotional period.

So you see, as we often suggest, just when you think the competition in food and grocery retailing in the Western U.S. has gotten about as hot as it can get, a grocery chain like Fry's in this particular case, steps in as it did in November-December, 2008 and turns that heat up just a notch more. And with the current recession getting worse, especially in California, Arizona, Nevada and most of the other western states, expect this competition to intensify.

In fact, we suspect it might not just be Kroger Co.-owned Fry's that decides to accept all competitors' coupons, including the Fresh & Easy deep discount store coupons, next time around. Another chain or two might join in the defensive action. And we suspect that "next time around" for taking all of its competitors' coupons will be fairly soon for Fry's. Stay tuned.