Tags: coupon | clipping | Boal | economy

Coupon-Clipping Indicator Signals Economy Headed for Trouble

Monday, 25 Feb 2013 12:16 PM

By Dan Weil

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The rate at which consumers are clipping coupons has risen to its highest since just before the 2007-09 recession, and that's bad news for the economy, says Coupons.com CEO Steven Boal.

His website follows how frequently people view and print coupons and their redemption rate.

Coupon.com's Internet Coupon Index shows a marked increase in coupon offers and demand now, Boal tells CNBC.

Forbes Columnist:
‘Who the Hell Cleared This?’

The trend is eerily reminiscent of the pattern in late 2007, before the recession broke out in December that year.

“The index tends to run in a range,” Boal says. “In September, October, November in 2007, it popped out of its range for the first time. … And, for the first time since then, we are seeing a tripping out of the range.”

The payroll tax increase and rising food and gas prices likely are sparking the coupon activity, he notes.

Boal notes that the most popular coupons being redeemed right now are for soup, cheese, rice, pasta and M&Ms.

“When people are feeling tightened, they seek comfort food. But, also things that make them feel better from personal care and beauty. Dove soap, Pantene and Vidal Sassoon are trending right now,” he explains.

In addition, he notes, those who weren't impacted by the last recession are now tightening their belts.

“It indicates to us that people are feeling particularly anxious right now,” Boal explains. “As we headed into 2013, I really didn’t expect this indicator to stand up.”

Other experts have a more mixed view of the consumer.

“We are starting to see the impact of higher taxes, but we have a positive wealth effect from increasing house prices and a boost from equities,” Robert Dye, chief economist at Comerica, told Reuters after the news that retail sales rose a paltry 0.1 percent in January.

“My expectation is that consumers are able to continue to increase spending but only moderately.”

Forbes Columnist: ‘Who the Hell Cleared This?’

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