Continued Growth of Coupon Distribution Builds on Record-breaking Trend and Boosts Redemption

LIVONIA, Mich., July 21 /PRNewswire-FirstCall/ -- Valassis (NYSE: VCI), one of the nation's leading media and marketing services companies, announced today that first half 2010 coupon distribution and redemption continue to build on the record-breaking growth trends of the past year.  In total, consumers saved nearly $2 billion with coupons in the first half 2010, a 37% increase over pre-recession levels.

Marketers offered 18 billion more consumer packages goods (CPG) coupons in the first half of 2010, up 11.4% from a year ago and 24.8% from mid-year 2008.  These findings were revealed as part of the Mid-year 2010 CPG Coupon Facts Report, released by NCH Marketing Services, Inc., a Valassis company.

As shopping behavior has become more entrenched in value-oriented habits that originated during the recession, overall redemption volume has increased 7.9% year-to-date, with a higher growth rate (+12%) coming from the Health and Beauty Care (HBC) segment in 2010.  The sustained growth in coupon redemption volume produced the seventh consecutive quarter of year-over-year increased usage.  HBC marketers also increased their use of coupons at the fastest pace, up 20.8% from a year ago, compared to 6.7% for the grocery segment

"Marketers have increased their promotional activity as consumers have embraced mindsets toward value and are defining what has been called the 'new normal' when it comes to these learned shopping behaviors," said Suzie Brown, Valassis Chief Marketing Officer.  "Consumers are adjusting their spending and becoming more strategic in their purchases as deal seeking escalates.  Today's shoppers don't leave the house without their coupons and they don't seek savings in just one place or from one media source."

First-half 2010 findings also reveal a shorter expiration of 9.5 weeks compared to 10.6 weeks for the full year of 2009.  In addition, face value is up to $1.43 for the first half of 2010 compared to $1.37 for 2009.

"More coupon discounts are crossing retailer checkouts as distribution and redemption are on the rise," said Charlie Brown, NCH Vice President of Marketing.  "However, as marketers are using coupons to motivate consumers and support the retailers selling their products, they also are changing tactics when it comes to face value, offer duration and multiple purchase requirements."  The average face value offered across all coupon media has grown 4.4% from a year ago; duration shortened by a week; and more than a quarter of all coupons require the purchase of two or more items

Overall, CPG marketers continue to allocate the largest share of coupons – 85% – in the free-standing insert (FSI) via newspaper and shared mail delivery methods.  The Internet continues to grow at a much faster pace than all other distribution media, up 79% from a year ago.  It represents 1.2% of all coupon distribution, the report revealed.

Among retailers, the largest increase in redemption volume so far this year has been in convenience stores, warehouse clubs and discount variety chains, such as dollar stores.  Redemption across those store types as a whole is up 36.6%.

About Valassis

Valassis is one of the nation's leading media and marketing services companies, offering unparalleled reach and scale to more than 15,000 advertisers.  Its RedPlum™ media portfolio delivers value on a weekly basis to over 100 million shoppers across a multi-media platform – in-home, in-store and in-motion.  Through its digital offerings, including redplum.com, consumers can find compelling national and local deals.  Headquartered in Livonia, Michigan with approximately 7,000 associates in 28 states and eight countries, Valassis is widely recognized for its associate and corporate citizenship programs, including its America's Looking for Its Missing Children® program.  Valassis companies include Valassis Direct Mail, Inc., Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc.  For more information, visit http://www.valassis.com or http://www.redplum.com.  To learn about advertising opportunities with RedPlum, please call 1-800-437-0479.

Cautionary Statements Regarding Forward-looking Statements

Certain statements found in this document constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: price competition from our existing competitors; new competitors in any of our businesses; a shift in client preference for different promotional materials, strategies or coupon delivery methods, including, without limitation, as a result of declines in newspaper circulation; an unforeseen increase in paper or postal costs; changes which affect the businesses of our clients and lead to reduced sales promotion spending, including, without limitation, a decrease of marketing budgets which are generally discretionary in nature and easier to reduce in the short-term than other expenses; our substantial indebtedness, and ability to refinance such indebtedness, if necessary, and our ability to incur additional indebtedness, may affect our financial health; the financial condition, including bankruptcies, of our clients, suppliers, senior secured credit facility lenders or other counterparties; our ability to comply with or obtain modifications or waivers of the financial covenants contained in our debt documents; certain covenants in our debt documents could adversely restrict our financial and operating flexibility; ongoing disruptions in the credit markets that make it difficult for companies to secure financing; fluctuations in the amount, timing, pages, weight and kinds of advertising pieces from period to period, due to a change in our clients' promotional needs, inventories and other factors; our failure to attract and retain qualified personnel may affect our business and results of operations; a rise in interest rates could increase our borrowing costs; we may be required to recognize additional impairment charges against goodwill and intangible assets in the future; possible governmental regulation or litigation affecting aspects of our business; the credit and liquidity crisis in the financial markets could continue to affect our results of operations and financial condition; uncertainty in the application and interpretation of applicable state sales tax laws may expose us to additional sales tax liability; and general economic conditions, whether nationally, internationally, or in the market areas in which we conduct our business, including the adverse impact of the ongoing economic downturn on the marketing expenditures and activities of our clients and prospective clients as well as our vendors, with whom we rely on to provide us with quality materials at the right prices and in a timely manner. These and other risks and uncertainties related to our business are described in greater detail in our filings with the United States Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q and the foregoing information should be read in conjunction with these filings.  We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Valassis

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