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Analyst: Coupons help at Bed Bath & Beyond

NEW YORK (AP) -- An analyst said Tuesday that fears that online retailers are undercutting Bed Bath & Beyond Inc. may be unwarranted, as the chain's coupons can give shoppers better discounts.

Traditional retailers from booksellers to electronics stores have been struggling to compete with Amazon.com Inc. and other online retailers that offer consumers convenience and low prices. A growing trend with shoppers is "showrooming," when people browse products in stores and then buy them more cheaply online. Target Corp., the country's second largest discounter, has promised to match prices of top online retailers.

While Bed Bath & Beyond has been "lax" with its website, the chain's coupons are helping it compete better than feared in stores, Brian Nagel of Oppenheimer said in a client note.

He did an analysis on dozens of products, and found that when consumers use a 20-percent-off coupon at a Bed Bath & Beyond store, they are getting a single item for almost 15 percent less than what Amazon charges, on average. Without a coupon, Amazon's prices are about 7 percent lower, excluding sales taxes.

Bed Bath & Beyond revenue in stores open at least a year, a key retail metric, grew 1.7 percent in the September-November period, 3.5 percent in the June-August quarter and 3 percent in March-May quarter. Growth rates slowed from the year before.

Nagel has an "Outperform" rating and $71 price target on Bed Bath & Beyond stock.

Shares of the company, which is based in Union, N.J., fell 60 cents, or 1 percent, to $61.32 in afternoon trading. They've dropped 7 percent in the past 12 months.