Why Which? super complaint was ‘a waste of time’
Which? has been concerned since 2012, although it has actually not done too much between 2012 and 2015. The result of the investigation has been eagerly anticipated by food and drink manufacturers and indeed the entire grocery retail supply chain.
The price war between supermarkets caused by the rise of the discount grocers has contributed to pressure on food suppliers and manufacturers. Research carried out earlier this year showed that the number of food and beverage makers in “significant” financial distress had increased by 94% in the previous 12 months.
Which? raised concerns relating to confusing and misleading special offers; a lack of easily comparable prices; reductions in pack sizes without a corresponding change in price; and price matching schemes leading consumers to falsely believe they have the best deal.
Over 100,000 signatures
Which? managed to stir up over 100,000 signatures to its petition relating to the issue before the complaint was submitted (the figure is now around 131,000) and it is targeting 150,000. For what purpose, I do not know.
But for me, the complaint has been a waste of time for Which?, the CMA and all the retailers, manufacturers and suppliers who provided information to determine if there was an issue to address.
There are two main reasons why. First, there is not a problem and second, the grocery market is changing, now more than ever. Grocery retailers are moving away from promotions, the tide is going out. Why?
The big four are now moving towards stable low prices, because the discounters do not run many promotions and that is where the big four are losing market share, and front end margin: that is margin which is less dependent on promotions and commercial revenue related to volume sales, retrospective discounts and so on.
Look at Tesco, for instance, it is reducing its stock keeping units or product range at an alarming rate and focusing on selling fewer products as cheaply as possible. That strategy, it is hoped, will bring consumers back.
And, it is not just because the market is changing that the Which?’s complaint was a waste time for all involved. It is also because there is not really a problem to be addressed.
Unfair pricing in a market of £178bn
Don’t get me wrong, there are instances of unfair pricing in a market of £178bn. Of course there are. There are a lot of products being sold to generate that type of money, mistakes happen. The CMA looked at pricing for 150,000 products and found that 800 had potentially misleading prices. In other words, around 0.5% of prices are potentially, not actually, misleading. Those percentages are not, in my view, a cause for concern.
The CMA’s conclusions support my view, although not in relation to the way the market is changing, that is not an issue it comments on. On the points Which? raised specifically, here are the CMA's responses:
1) Special offers – “the evidence and data that we gathered shows that the prevalence of these issues is relatively limited”
2) Comparable/unit pricing – “in the absence of clear guidance and/or relevant case law, there are differing interpretations and inconsistencies across the grocery market as to how unit prices should be displayed” the “regime can be improved”
3) Pack sizes – “We have concluded that the information is currently being presented to consumers (i.e. the size of the product and its price) is sufficient when a pack changes size”
4) Price matching – “We have not found evidence that the current approach to price match schemes causes significant consumer harm”
When focussing on unfair commercial practices, Which? should have borne in mind that groceries in the UK are, according to the British Retail Consortium, 7% lower than the average across the Eurozone. So, in summary, we get a fair deal from our grocery retailers.
- Mark Jones is a solicitor with law firm Gordons.
