Even through a recession, and despite a strong reported preference for them, US consumers redeem just 1-3% of paper coupons.

But coupon distributors take heart: up to half the coupons that Kroger sends to its customers are redeemed, courtesy of the data-mining firm it uses (and part-owns) to target specific customers, writes the Associated Press (via Retailer Daily).

Kroger, the largest US traditional grocery chain, owns a share in data firm dunnhumbyUSA, and uses it to track and analyze intelligence collected from its 55 million shopper cards.

Kroger uses dunnhumby to guide promotions, pricing, placement — even varying stocking patterns from store to store.

"This level of personalization is a direct link to our customers no other US grocery retailer can replicate," David B. Dillon, Kroger's chief executive, told investors Dec. 9.

British megaretailer Tesco is the majority owner of dunnhumby, which it deftly used to expand – and is forecast to become the world's No. 2 retailer by 2012, surpassing France's Carrefour.

Kroger invested in dunnhumby and five years ago formed dunnhumbyUSA, which also has as clients Coca-Cola Co., The Home Depot Corp., Procter & Gamble Co., Macy's Inc., General Mills Inc., and Kraft Foods Inc.

According to a recent comScore survey, traffic to coupon sites increased 32% in the month of November.