Consumers could be losing hundreds of millions of pounds every year due to “dodgy” pricing tactics, claimed Which? Up to 40% of groceries, measured by revenue, are currently sold on promotion, with total spending on groceries and toiletries reaching £115bn in 2013.
The big retailers’ pricing tactics have, over the past seven years, consistently mislead and confused shoppers, it argued. “Dodgy” multi-buys, shrinking products and baffling sales offers that exaggerate discounts were examples of how the retailers tried to manipulate consumer spending by creating the illusion of savings that don’t exist, it added.
‘Misleading special offers’
Specific areas of concern included: confusing and misleading special offers; lack of easily comparable prices due to unit pricing calculations and ‘shrinkflation’ – shrinking pack sizes without a corresponding price reduction.
Which? executive director, Richard Lloyd, said: “Despite Which? repeatedly exposing misleading and confusing pricing tactics, and calling for voluntary change by the retailers, these dodgy offers remain on numerous supermarket shelves. Shoppers think they’re getting a bargain but in reality it’s impossible for any consumer to know if they’re genuinely getting a fair deal.
“We’re saying enough is enough and using one of the most powerful legal weapons in our armoury to act on behalf of consumers by launching a super-complaint to the regulator. We want an end to misleading pricing tactics and for all retailers to use fair pricing that people can trust.”
‘Dodgy’ pricing tactics
- ‘Confusing and misleading special offers
- ‘Lack of easily comparable prices due to unit pricing calculations
- ‘Shrinking pack sizes without matching price reduction’
But the British Retail Consortium rejected the accusations. Retailers were committed to treating customers fairly, said its director of business and regulation Tom Ironside.
‘Errors may from time-to-time occur’
“We do not accept the core implications set out in this super-complaint. The examples set out are very specific in nature and are not in any way indicative of broader systemic problems across the retail industry. With thousands of products and special offers in store every day, errors may from time-to-time occur, however these are rare in nature and are resolved quickly by the retailer concerned.”
Millions of shoppers enjoyed the benefits of price promotions and special offers, said Ironside. He highlighted research revealing that – with the exception of fruit and vegetables – food prices in British supermarkets were on average 7% lower than the Eurozone average.
Major supermarkets had worked with government and public bodies to make pricing clearer and simpler for customers, such as improving the way that unit price is displayed, he added.
“We will examine closely the content of this super-complaint. With a consultation expected soon on a revised Pricing Practices Guide, it would seem sensible to consider the issues raised in the super-complaint as part of that process,” concluded Ironside.
Which?’s super-complaint is the first to be referred to the CMA using legal powers set out under the Enterprise Act 2002.
The CMA pledged to consider the super-complaint before deciding whether supermarkets' pricing had disadvantaged consumers. It promised a verdict within 90 days. Options included: taking consumer enforcement action, recommending improved information to shoppers issuing a clean bill of health. See the full range of options below.
- Recommending the quality and accessibility of information for consumers is improved
- Encouraging businesses in the market to self-regulate
- Making recommendations to government to change the legislation or public policy
- Taking competition or consumer enforcement action
- Instigating a market investigation or market study
- Clean bill of health
Shrinkflation is the process of items shrinking in size or quantity while their prices remain the same.