Supermarket pricing tactics ‘misleading’, says CMA
Supermarkets were breaking trading laws by using hundreds of misleading offers on their shelves every day, the consumer Watchdog Which? claimed in a super-complaint to the Competition Markets Authority(CMA) in April.
Discounted prices on promotions such as ‘was/nows’ were being advertised for longer than the products’ original higher prices, said Which? in the complaint, which was supported by more than 120,000 signatories.
“For example, we’ve found Pepsi Max (2 litres) advertised at £1.98 for 28 days, but then went on a £1 ‘was £1.98’ offer for 63 days, which breaks government guidelines,” Which? said.
As a result of the complaint the CMA, which had 90 days to respond to Which?, announced a series of measures to improve compliance, bring greater clarity to shoppers and to simplify regulation.
The CMA will work with supermarkets to cut promotional practices that could mislead consumers, it said today (July 16).
Practices that could mislead consumers
CMA action points:
- Work with supermarkets to prevent misleading promotional practices
- Clarify pricing regulations on offers
- Have BIS publish a best-practice guide on pricing
“This includes the practice of running ‘was/now’ promotions where the discount price is advertised as a promotion for longer than the higher price applied,” it said.
It was also recommended that the Chartered Trading Standards Institute clarified how pricing legislation applied to promotional practices, which would be included in the CMA’s ‘Pricing Practices Guide’.
The CMA also asked the Department for Business, Innovation and Skills (BIS) to publish best-practice guidelines on the legibility of unit prices and look at ways to simplify and clarify legislation. Such improvements would include how the law requires items to be unit-priced when they are on promotion.
CMA senior director Nisha Arora, said: “We welcomed the super-complaint, which presented us with information and demanded closer inspection [of supermarkets' pricing practices].
“We have found that, whilst supermarkets want to comply with the law and shoppers enjoy a wide range of choices, there are still areas of poor practice that could confuse or mislead shoppers.”
The CMA’s report confirmed the practices Which? believed had been going on for many years, the organisation’s executive director Richard Lloyd said.
Clean up their act
Supermarkets were now on notice to clean up their pricing practices or face legal action, he added.
The BRC said:
“It is very clear that the allegations contained in the super-complaint were blown out of all proportion and that the CMA recognises supermarkets take compliance seriously.
“Our members will continue to work closely on the Pricing Practices Guide to ensure transparency and fair treatment for our customers.”
- Source: BRC director of business and regulation Tom Ironside
“Given the findings, we now expect to see urgent enforcement action from the CMA. The government must also quickly strengthen the rules so that retailers have no more excuses,” Lloyd said.
British Retail Consortium (BRC) director of business and regulation Tom Ironside said: “It is very clear that the allegations contained in the super-complaint were blown out of all proportion and that the CMA recognises supermarkets take compliance seriously.
“Our members will continue to work closely on the Pricing Practices Guide to ensure transparency and fair treatment for our customers.”
Meanwhile, Aldi revealed a number of new “game-changing” supplier commitments yesterday (July 15), which included not forcing suppliers to fund promotions, such as the popular ‘buy-one-get-one-free’ offers.
The discounter, which also became the first retailer to sign up to the National Farmers Unions’ Fruit and Veg pledge, wouldn’t charge suppliers for customer complaints, missed, or late deliveries either, it said.
