An investigation into supermarkets’ pricing tactics has found that most retailers take compliance “seriously” but that some are “misleading” consumers.
- Competition and Markets Authority investigation concludes that only a minority of large retailers’ pricing practices are “confusing”
- Unveils measures to bring clarity for shoppers and simplify regulations
- Recommends Trading Standards and Government act on clarifying legislation and promoting best practice
The Competition and Markets Authority (CMA) investigated a ‘super-complaint’ from Which? that raised concerns about “confusing and misleading promotions and a lack of easily comparable prices because of the limitations of unit pricing”.
However, the CMA has concluded that “these problems are not occurring in large numbers across the whole sector and that generally retailers are taking compliance seriously to avoid such problems occurring”.
The CMA said its investigation found some examples of pricing and promotional practices that “have the potential to confuse or mislead consumers and which could be in breach of consumer law”. It said: “Where there is evidence of breaches of consumer law this could lead to enforcement action.”
As such, the CMA has unveiled measures “to improve compliance, bring greater clarity to shoppers and simplify the regulations”. It wants to “work with businesses to cut out promotional practices which could mislead consumers”, including the practice of running ‘was/now’ promotions where the discount price is advertised as a promotion for longer than the higher price applied.
Areas of poor practice
It has recommended that the Chartered Trading Standards Institute “clarifies how the legislation applies to certain promotional practices”. It has also advised the Department for Business, Innovation and Skills publishes best practice guidelines on the “legibility of unit prices, and looks at ways to simplify and clarify legislation”.
“Whilst supermarkets want to comply with the law there are still areas of poor practice that could confuse or mislead shoppers”
Nisha Arora, CMA
CMA senior director, consumer Nisha Arora said: “We welcomed the super-complaint, which presented us with information that demanded closer inspection. We have gathered and examined a great deal of further evidence over the past three months and are now announcing what further action we are taking and recommending others to take.
“We have found that, whilst supermarkets want to comply with the law and shoppers enjoy a wide range of choices, with an estimated 40% of grocery spending being on items on promotion, there are still areas of poor practice that could confuse or mislead shoppers. So we are recommending further action to improve compliance and ensure that shoppers have clear, accurate information.”
The CMA acknowledged that the grocery industry is “highly competitive and makes a significant contribution to the UK economy, accounting for an estimated £148bn to £178bn in 2014”.
The super-complaint focused on potentially misleading special offers, unit pricing, price-matching schemes and changing pack sizes.
In response to the CMA findings, Which? executive director Richard Lloyd, said it still expected “urgent” action from the body.
“Given the findings, we now expect to see urgent enforcement action from the CMA”
Richard Lloyd, Which?
“The CMA’s report confirms what our research over many years has repeatedly highlighted: there are hundreds of misleading offers on the shelves every day that do not comply with the rules,” he said. “This puts supermarkets on notice to clean up their pricing practices or face legal action.
“Given the findings, we now expect to see urgent enforcement action from the CMA. The Government must also quickly strengthen the rules so that retailers have no more excuses.
“As a result of our super-complaint, if all the changes are implemented widely, this will be good for consumers, competition and, ultimately, the economy.”