Daily deal site LivingSocial is teaming up with Whole Foods for a very special, first-of-its-kind promotion: Today only (Tuesday, September 13), $10 buys a voucher worth $20 of merchandise at the supermarket chain. LivingSocial will sell up to one million of the vouchers today to subscribers all over the country.
For the most part, daily deals from the likes of Groupon, LivingSocial, and other sites fall squarely in the “want” category (as opposed to the other type of purchase, a “need”). Entertainment, restaurant dining, and spas and massages are among the top purchases. All fun, but hardly essential stuff.
Today, however, LivingSocial, which has previously broken new ground in the daily deal market by introducing “Instant Deals”—discounted restaurant vouchers that must be used within a few hours of purchase in Washington, D.C., and New York City, among other cities—is offering a daily deal on something everybody needs: groceries.
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Anyone who is a LivingSocial subscriber, or who signs up today, can purchase today’s national deal: $10 for a $20 voucher at any Whole Foods around the country. Once the purchase is made, a subscriber can bring the voucher code into a Whole Foods, where it will be converted into a gift card.
Daily deal sites have occasionally run grocery and food promotions in the past, but typically, these deals have been for small businesses, in limited locations—usually, for a single store. This is the first grocery daily deal offered on such a broad, national scale.
How can Whole Foods participate in such a deal? Won’t it lose money with such a promotion? Possibly. Even though the grocery chain has a reputation for high markups (it’s been nicknamed “whole paycheck”), supermarkets generally run on thin profit margins. The point of these promotions, though, is to attract as many shoppers as possibly—and hope that they wind up buying a lot more than $20 worth of merchandise, when redeeming the voucher and beyond.
A Reuters report also indicates that LivingSocial may be subsidizing today’s deal—essentially, paying Whole Foods for its participation in the hopes that the daily deal site will gain tens, perhaps even hundreds of thousands of new subscribers.