Decision due on Which? super-complaint into supermarket pricing tactics

Ahead of the deadline for the Competition and Markets Authority (CMA) to respond to Which?’s super-complaint, more than 100,000 disgruntled shoppers have pledged their support to our campaign calling on supermarkets to Put an End to Misleading Pricing.

Over the last seven years Which? has consistently identified a range of misleading and confusing pricing tactics in supermarkets – like dodgy multi-buys, shrinking products and baffling sales offers that exaggerate discounts. We also found confusing unit pricing on products in stores.  After having 90 days to review the evidence submitted, the deadline for the CMA to respond to our super-complaint is Sunday, 19 July.

Promotional pricing is big business across the retail sector as a whole with about 40% of groceries (by revenue) regularly sold on promotion. Retailers know how receptive shoppers are to products they perceive as money-saving. Seven in 10 (69%) say that they sometimes feel that it is difficult to work out whether special offers are actually a good deal.

As part of our campaign to Put an End to Misleading Pricing, our research has revealed numerous examples of supermarkets using manipulative pricing tactics that create the appearance of a price reduction. Some ‘offers’ even appear to be breaking government guidelines.

We identified a number of practices which caused us concern:

  • confusing and misleading special offers;
  • a lack of easily comparable prices because of the way unit pricing is being done; and
  • shrinking pack sizes without any corresponding price reduction.

In addition, supermarket price match schemes for a basket of goods may also make price comparisons more difficult, as the range and types of products on offer can make accurate price matching impossible to achieve.

Which? executive director, Richard Lloyd, said:

“Supermarkets have been using smoke and mirrors for years to manipulate consumers’ spending and create the illusion of savings that don’t exist. When the regulator reports back, we expect it to listen to the tens of thousands of people who have backed our super-complaint and put an end to misleading pricing practices.”

Examples of pricing tactics submitted in the super-complaint

Confusing and misleading special offers:

  • Pepsi Max (2 litres) was sold at £1.98 in Morrisons for 28 days but then went on a £1 ‘was £1.98’ offer for 63 days, which breaks government guidelines.
  • Asda increased the price of Robinsons Orange Fruit Squash (1 litre) from £1 to as much as £1.59 while on ‘2 for £2.50’, creating the illusion of a saving but actually costing shoppers 50p more when buying it on offer.

Inconsistent unit pricing:

  • The unit price on some sauces was 100 per ml and on others per 100g making it impossible -to make a price comparison.
  • We found examples of cakes being priced per item or per 100g which makes it impossible to compare prices and work out the product offering the best value for money.

Shrinking pack sizes:

  • A box of 100 Twinings Assam tea bags was £4.40 in Tesco but when the pack shrunk to 80, the price increased costing £4.49. In Sainsbury’s the price of the tea bags remained the same (£4.50) despite the loss of 20 tea bags.
  • Surf Essential Oils Powder Tropical Lily & Ylang Ylang remained priced at £5 in Ocado and Tesco despite shrinking from 25 washes (2kg) to 23 washes (1.61kg).

Background

  1. Which? submitted a super-complaint to the Competition and Markets Authority about misleading supermarket pricing practices on 21 April 2015. More details on the super-complaint can be found here.
  2. More than 103,000 people have supported our super-complaint to the regulator. Sign up and pledge your support which.co.uk/misleadingpricing
  3. We used data from independent shopping website co.ukto find examples of pricing practices used by retailers from January 2014 to April 2015
  4. 2,075 UK adults were interviewed online between 18th and 19th March 2015. Data were weighted to be demographically representative of the UK population.
  5. According to data from Kantar Worldpanel (52 w/e 01 March 2015) 39.9% of groceries (by revenue) in Great Britain are currently sold on promotion.
  6. Government guidelines set out how retailers should use special offers, and flouting those guidelines could potentially put a shop in breach of the Consumer Protection from Unfair Trading Regulations 2008.The guidelines say that what’s reasonable for a special offer depends on the circumstances, so it’s ultimately for the courts to decide whether rules have been broken in each individual case.
  7. Find out how you can complain about a dodgy deal or misleading multibuy by visiting our Consumer Rights website.

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