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Bed Bath & Beyond plans to reduce coupons to increase profits



Soon, you may not see too many Bed Bath&Beyond coupons in your mailbox.

For better or worse, this large retailer is known for its recurring coupons, which are sent via mail and email, and are attracted by promising 15% or 20% discounts on bedding and other home decorations The customer enters the store.

However, in order to increase profits and be more competitive in pricing with competitors, the company is planning to reduce it.

Chief Commodity Officer Joe Hartsig said in a virtual meeting with investors on Wednesday: “Today, we are too dependent on coupons.”

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Bed Bath & Beyond said it has researched 405 million shopping baskets and 285,000 items and found that 40% of promotions are considered “invalid” and unnecessary.

The company said it had 1.4 million new customers this year, largely due to the coronavirus pandemic and people wanting to buy cleaning supplies or tidy up their houses. The company said that these new customers are on average six years younger than them and are 20% less likely to use coupons, which gives the company more reasons to reduce promotions.

However, an analyst warned that retailers need to proceed with caution and not upset those who rely on coupons the most.

Neil Saunders, Managing Director of GlobalData Retail, said: “Financially speaking, this is a necessary move because coupons erodes profits. “However, many Bed Bath & Beyond customers like coupons, so reducing them may affect the number of shoppers. And sales. “

Sanders added: “It’s a lot like ending an addition: in the long run, it is wise and brings benefits, but it may hurt in the short term.

This shift is part of Bed Bath & Beyond’s broader transformation strategy, which will increase sales and profits in the next few years. When formulating a three-year roadmap on Wednesday, the company proposed new financial goals. The company predicts that by fiscal 2021, same-store sales (tracking revenue online and at least 12 months after opening the store) will “stay” and will grow in the low to mid-single digits by 2023.

The company plans to make a capital investment of US$1 billion to US$1.5 billion in the next three years to rebuild stores and upgrade its e-commerce operations, among other initiatives.

In the broader market sell-off, Bed Bath & Beyond stock fell more than 11% on Wednesday. Its stock has risen by more than 38% this year, bringing its market value to $2.7 billion.


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