UK supermarkets have today (5 December) fended off accusations that their promotional offers are misleading.
Research by the BBC, undertaken with consumer group Which?, looked at the pricing tactics used by the four biggest chains and found that some offers actually cost more than if the products were bought separately.
Go deeper with GlobalData
The study, to be broadcast in an edition of the BBC’s Panorama series tonight, found that at Morrisons, a “value” pack of Clover spread was GBP1.70 (US$2.60), more than the two smaller packs which comprise the same volume.
A spokesperson from Morrisons admitted a minority of larger volume products do not offer better value but stood by the retailer’s promotions.
“We have a record of offering cracking deals to our customers and we know they understand our pricing policy. We try to ensure that larger packs offer better value for money and achieve this across the vast majority of the 20,000 products we sell in store”, the spokesperson said. “Customers also clearly understand that when we offer a deal it doesn’t mean we are able to offer the same discount on different size packs of the same product.”
Tesco also faces scrunity in the BBC programme, The Truth About Supermarket Price Wars. The programme alleges that Tesco engaged in “price establishing”, where retailers sell a product at a higher-than-usual price for a period of time, then label it as a discount when the price falls back to its original price. Tesco’s medium whole fresh chickens, which rose from GBP4 up to GBP5 for more than two months before the retailer’s Big Price Drop, a major promotions campaign introduced in September, saw it drop back down to the original price of GBP4.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe spokesperson said that Tesco’s pricing of chicken was “well within” the recommendations set out in the BIS (Department for Business, Innovation and Skills) Pricing Practices Guide, which aims to promote good practice in giving information about prices.
“The price of chicken was increased on 18 July (as a result of inflation), 70 days before the Big Price Drop was introduced on 26 September”, the spokesperson said.
The spokesperson added: “Tesco is investing GBP500m through the Big Price Drop to help customers with real price cuts at a time when many are feeling the pinch. We never deliberately mislead customers. Our staff work very hard to make sure our price labelling is 100% up-to-date and clear, in the very small number of cases where we have fallen short of this target we sincerely apologise to customers.”
Sainsbury’s, the UK’s third-largest grocer, was criticised for loose fruit being more expensive than some packaged items. For example, at Sainsbury’s, a pack of five bananas cost GBP1, but if bought loose, the same number cost 42p.
A Sainsbury’s spokesman said customers wanted the choice for fruit and vegetables to be priced per pack or item.
He said: “However, we are not always able to do this as the natural variability of these products means they come in many shapes and sizes and in some cases (as with loose onions, for example) the law requires us to price per kilo.”
The spokesperson added: “Some customers also like being able to choose the size of product that they prefer from loose vegetables and understand that prices will vary according to the choices they make.”
Asda said some of its pricing discrepancies highlighted by Panorama were caused by packaging used by branded manufacturers, over which it has no control.
“However occasionally, mistakes can happen – especially when we reduce prices quickly and the price of bigger packs falls out of line”, a spokesperson added,
“Whenever we become aware of an error, we’ll work quickly to put it right, as we have done in all the examples raised by the programme. We always aim to offer clear, helpful and accurate pricing information on the thousands of items we offer customers.”
The Office of Fair Trading (OFT) said it may investigate the claims made in the documentary.
“Supermarkets, like other businesses, need to advertise their prices and special offers in a way that is fair and transparent,” it said. “We would be concerned about any misleading pricing or promotions and, with Trading Standards, we will look carefully at any findings Panorama shares with us.”
