The Office of Fair Trading’s probe into furniture and flooring retailers’ promotional tactics has been blamed for an “unusual” decline in footfall on retail parks including the critical bank holiday weekend.
In the seven days to August 25, shopper numbers across retail parks fell 4.7% compared to the previous week according to The Experian Footfall Index. Experian called it an “unusual” decline and added: “The result is perhaps impacted by recent high profile scrutiny of the pricing strategies of a handful of home retailers.”
The previous week, footfall across retail parks increased by 4.7%.
The OFT, which is scrutinising whether or not furniture retailers are artificially inflating the prices of goods in order to sell them through a Sale at a more attractive discount, has come under fire for its handling of the investigation.
The British Retail Consortium wrote a letter to the OFT on Tuesday raising its concerns. The move follows a statement made last week by the BRC’s director general Helen Dickinson in which she blasted the OFT for its “apparent lack of process and consultation in this investigation”.
Furniture retailers have backed the BRC’s stance, arguing that the OFT’s announcement of the investigation had been rushed out without consultation with the industry.
Last Thursday Retail-week.com revealed that the six retailers to have received letters from the OFT warning them of the investigation were Carpetright, DFS, Dreams, SCS, Furniture Village and Harveys/Bensons for Beds.
The OFT revealed details of the investigation the following day (Friday) but did not disclose the names of the six retailers. The OFT has asked the retailers to “cease using pricing practices that mislead consumers by signing legally enforceable undertakings” by the autumn.
Dickinson said she was concerned the language the OFT used indicated that it had already proved that a breach of consumer protection legislation had been made. She attacked the OFT for insisting on “totally impractical deadlines”.
An OFT spokesman declined to comment on the concerns raised by the BRC, but wished to emphasize that it “has not named the retailers”. He added: “We will respond to the letter in due course.”
Carpetright said it “is co-operating fully with the OFT. There is no suggestion of Carpetright having behaved in a manner which breaches competition law”.
A Furniture Village spokesman said it would be “inappropriate” to comment until the findings are published.
DFS, Dreams, ScS and Steinhoff, which owns Bensons for Beds and Harveys, declined to comment.
Industry sources suggested that the OFT is seeking to flex its muscles in order to demonstrate its value.