After repeatedly exposing misleading pricing practices in the grocery sector, Which? has deployed one of its most powerful legal weapons – a super-complaint – to demand action from the Competition and Markets Authority (CMA).
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. Many retailers are creating the illusion of savings that don’t exist and are manipulating consumer spending by misleading people into choosing products they may not have chosen if they knew the full facts.
About 40% of groceries (by revenue) in Great Britain are currently sold on promotion. With £115 billion spent on groceries and toiletries in 2013, consumers could be collectively losing out to the tune of hundreds of millions of pounds, even if only a very small proportion of offers are misleading.
The pricing practices of concern that Which? has identified are:
- 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.
The cumulative impact of all these different pricing tactics means it is virtually impossible for people to know if they are getting a fair deal. This is particularly true when prices vary frequently, when consumers are in a rush or they are buying numerous items of relatively low value. Using legal powers under the Enterprise Act 2002, Which? has made the first super-complaint to the CMA, urging it to take action.
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.”
Examples of confusing special offers include:
Seasonal offers – where the higher price only applied out of season. We found a Nestle Kit Kat Chunky Collection Giant Egg was advertised at £7.49 for just 10 days in January at Ocado, but then sold on offer at £5 for 51 days (2015).
Was/now pricing – the use of a higher ‘was’ price where the item has been available for longer at the lower price. Heston from Waitrose Acacia Honey & Ginger Hot Cross Buns were advertised at £1.50 for just 12 days before going on offer at “£1.12 was £1.50” for 26 days (2015).
Multi-buys – prices increasing when going on multi-buy so that the saving is less than claimed, non-existent or products are more expensive when they are included in the multi-buy. Asda increased the price of a Chicago Town Four Cheese Pizza Two-Pack from £1.50 to £2 as it went onto multi-buy at two for £3. It went back to £1.50 as the ‘offer’ ended (2014).
Larger pack better value – where the individual item price of the bigger pack is actually more expensive. Tesco sold four cans of Green Giant Original Sweetcorn for £2 (was £2.44), but six cans were proportionately more expensive, at £3.56. That’s despite the fact the larger pack said ‘special value’ (2014).
Notes to editors
1. Which? has legal powers under the under Section 11 of the Enterprise Act 2002 enabling it to file super-complaints with the Competition and Markets Authority (CMA). A super-complaint allows designated consumer bodies to complain to the CMA and specific sectoral regulators about market features that may be significantly harming consumers’ interests. Once Which? has submitted its super-complaint to the CMA, the regulator has 90 days to respond. Which? last issued a super-complaint in June 2011, when it asked the Office of Fair Trading to investigate excessive credit and debit card surcharges.
2. 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.
3. According to Which? analysis of ONS data, £115 billion was spent on groceries and toiletries in 2013.
4. We used data from independent shopping website mySupermarket.co.uk to find examples of special offers
5. Waitrose said that ‘this was an honest and isolated mistake for which we apologise.’ Waitrose have said that they will investigate how this occurred and take steps to ensure it doesn’t happen again.