Unclear Tesco pricing could be ‘unlawful’, Which? warns, as it reports the grocer to the regulator

9 June 2023

Tesco’s lack of clear pricing on the vast majority of its food and drink promotions could mean it is breaking the law, according to Which?, as the consumer champion reports the retailer to the competition regulator and calls for the supermarket to display vital pricing information on loyalty card offers.

Unit pricing – the price per 100g or 100ml, for example – helps shoppers compare prices in-store and online, as well as across supermarkets, and make informed decisions about what to buy at the best value. This is particularly crucial as grocery inflation has hit historic highs.

Which? believes Tesco’s decision not to display unit pricing on its Clubcard offers could be a “misleading practice” under the Consumer Protection From Unfair Trading Regulations 2008 (CPRs), as it can make it unnecessarily difficult for shoppers to determine which product on the shelves is cheapest.

This is a prime example of the kind of confusing pricing practice the Competition and Markets Authority must target with its ongoing review of grocery unit pricing, and which the government must look to eradicate following its conclusion

Which? is urging Tesco to act now and introduce unit pricing on Clubcard prices as soon as possible to help hard-pressed shoppers find the best deals.

While rules on unit pricing are set out in the Price Marking Order 2004, under the CPRs retailers must also avoid ‘unfair commercial practices’. Which? believes under these rules unit prices could be seen as ‘material information’ which most people would need in order to make an informed decision about how to get the best value from what they are buying.

Which? has found issues with unit pricing across all supermarkets but Tesco stands out as it consistently omits unit pricing from Clubcard offers, which now account for almost all promotions it offers on groceries. In comparison, Sainsbury’s launched a similar scheme in April called Nectar Prices and these do include unit prices both in-store and online.

In one example, Which? found Heinz tomato ketchup in Tesco where the label shows the standard price for a 700g bottle is £3.90 (or 55.7p per 100g). A prominent Clubcard label shows the bottle is on offer, at £3.50 for the same 700g bottle – but there is no explanation of the unit price, which would be 50p per 100g. However, a 910g bottle of exactly the same ketchup on the shelf below is £3.99 for everyone (43.8p per 100g). The cheapest per 100g is the 910g bottle for £3.99 – but many shoppers could wrongly assume the Clubcard “offer” was the best deal available.

When Which? looked at two different multi-packs of Walkers ready salted crisps at Tesco, the label showed the price for a multipack of 12 x 25g bags cost £3.25, or £1.08 per 100g, for everyone. The bottom label showed the price for 6 x 25g bags was £1.75 for non-Clubcard members (£1.17 per 100g). For those with a Clubcard the price for 6 x 25g bags was £1.50, so in contrast to the ketchup, the Clubcard price provided the best value at £1 per 100g – but again, it was difficult for consumers to make an informed decision.

Which? believes that by omitting the unit price information on Clubcard offers, Tesco is leaving its customers at risk of spending more on their food shop because they don’t have all the information they need to make an informed choice. At a time when there is a cost of food crisis and many people are finding it hard to feed their loved ones, such an omission could be making things worse for people already struggling.

In 2015, in response to Which?’s super-complaint on supermarket pricing, the Competition and Markets Authority (CMA) said that it could be argued that failure to display the unit price for the new, lower price for a reduced item could be considered a misleading omission under the CPRs, as it has the potential to constitute material information which the average consumer needs to take an informed decision.

Which? believes the same arguments could apply to Tesco’s Clubcard promotions – however it would ultimately be for the courts to decide if the law is being broken in any given case.

Which?’s 2015 super-complaint led to a series of recommendations to improve unit pricing in supermarkets – but the impact was limited because the legislation and guidance wasn’t changed. In January 2023, the CMA announced a new review which would look at compliance with the law on unit pricing by retailers. In reporting Tesco to the CMA Which? is urging the regulator to consider whether Tesco is in breach of the CPRs as part of its review. The CMA has said it is due to publish a report, including recommendations to the government, in late July. It said the cost of living crisis meant it was important that shoppers were able to compare products like-for-like.

Chancellor Jeremy Hunt said last month that the government ‘stands ready’ to update pricing rules and guidance following the CMA’s review. Which? has asked the CMA to investigate Tesco’s behaviour as part of its review as well as sharing the findings with the Department for Business and trade and expects government action to address confusing pricing practices to follow.

Tesco told Which? its labelling has been approved by Trading Standards.

Trading Standards in Hertfordshire – where Tesco has its UK base – told Which? it had advised Tesco its labelling was compliant with the Price Marking Order 2004 in December, but did not say if it had considered possible breaches of the CPRs. It said its advice would be reviewed again this year and that it hoped the CMA’s review would lead to changes that bring increased clarity.

As part of its Affordable Food For All campaign, Which? has been calling on all supermarkets to ensure pricing is completely transparent, so that shoppers can easily compare products and find which offers the best value.

Supermarkets should also stock smaller branches and convenience stores with essential budget line items so that households, including those on a low income, are not forced to pay over the odds for basic foods.

Sue Davies, Which? Head of Food Policy, said:

“Tesco’s unclear Clubcard pricing is at best confusing for shoppers struggling with soaring food inflation and at worst, could be breaking the law. This is simply not good enough from the UK’s biggest supermarket. Tesco should think of its customers and act now to introduce clear unit pricing on all offers, including Clubcard promotions, so shoppers can easily find the best value items.

“We expect the regulator to look at unit pricing on the growing number of supermarket member price schemes as part of its review. At this time of crisis, supermarkets cannot cut corners; they have a duty to ensure pricing is clear so that customers can get the best value. We also need to see these retailers support consumers in the face of high inflation by stocking a range of essential budget lines in smaller stores, particularly in areas where people are struggling most.”

ENDS

Notes to editors:

Which? Affordable Food For All Campaign

The consumer champion’s Affordable Food For All campaign calls on supermarkets to do more to ensure own-brand budget line items are widely available throughout all branches – including in smaller ‘convenience’ stores. They should also make pricing and offers more transparent.

Almost 88,000 supporters have signed Which?’s petition so far calling on the supermarkets to take action.

Alongside the University of Leeds Consumer Data Research Centre, Which? has developed the Priority Places For Food Index which shows where in the UK people are the most vulnerable to food insecurity.

Which? Research examples

Toilet roll – You can see in the examples below how unit pricing makes it easy to see the price per 100 sheets of toilet tissue in Sainsbury’s (the label at the top of the picture), while the lack of unit pricing on the Clubcard offer in the bottom picture leaves the cost per 100 sheets unclear.

2.Ketchup – Here’s an example of two bottles of Heinz tomato ketchup in Tesco – the top label shows the non-Clubcard price for a 700g bottle is £3.90 (or 55.7p per 100g). Those with a Clubcard would pay £3.50 for the same 700g bottle. The bottom label shows the price for a 910g bottle of exactly the same ketchup on the shelf below – it’s £3.99 for everyone, or 43.8p per 100g. So which is the cheapest per 100g? Perhaps surprisingly, the answer is the 910g bottle for £3.99 – the Clubcard price doesn’t make the smaller bottle the cheapest option, as it would be 50p per 100g.

3. Walkers crisps – Here’s another example, this time showing two different multi-packs of Walkers ready salted crisps at Tesco. The top label shows the price for a multipack of 12 x 25g bags costs £3.25, or £1.08 per 100g for everyone. The bottom label shows the price for 6 x 25g bags is £1.75 for non-Clubcard members (£1.17 per 100g). For those with a Clubcard the price is £1.50 – but is this better value than the 12 pack, per 100g? The answer (in contrast to the ketchup) is yes, the Clubcard price would be the best value at £1 per 100g.

Previous Which? research:

50 UK areas most at risk in the cost of food crisis identified by Which? as it calls for supermarkets to step up – When Which? previously looked at the most at-risk places for food insecurity, it found the Scottish central belt, the Welsh Valleys, North East England, Yorkshire and the West Midlands were among the worst places for accessing affordable food. The research found that overall 95 Westminster constituencies where at least half of neighbourhoods in the constituency were more likely to have trouble easily accessing affordable food.
Inconvenient truth: supermarket giants failing to stock budget ranges in smaller stores, Which? Reveals – In a mystery shop of 123 Asda, Morrisons, Sainsbury’s and Tesco stores, Which? sent researchers to check the availability of a list of around 29 everyday budget items, including dried pasta, tinned tomatoes, fresh fruit and vegetables, minced meat and tinned fish. On average, the biggest supermarket stores had 87 per cent of the products Which? was looking for, or an equivalent product in the same range. However, in small Tesco Express, Sainsbury’s Local and Morrisons Daily convenience stores, the budget line items on Which?’s list were available less than 1 per cent of the time.
The cost of convenience? That’ll be £800 please – Which? reveals the extra cost of shopping local – Which?’s research found that shoppers buying the same 75 items at Tesco Express, including Anchor Spreadable Butter, a Hovis white bread loaf and own-brand milk would be spending an extra £15.73 on average a week than those shopping online or at a larger Tesco store – £817.91 more over the course of a year.

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk.

Press Release