Supermarkets still not compliant with consumer pricing guidelines, finds Which?

United Kingdom

Four years on from its super-complaint to the Competition & Markets Authority about supermarkets’ pricing practices (see our Law-Nows here and here), Which? has conducted a follow-up investigation which, it says, appears to reveal that many UK supermarkets continue to flout the rules by offering deals that don’t necessarily constitute a legitimate saving. It is now reporting its findings to the CMA.

Following the 2015 super-complaint, the standing Guidance for Traders on Pricing Practices was updated and republished by the Chartered Trading Standards Institute (see our Law-Now here). The guidance is not legally binding, but non-compliance can be taken as evidence of a breach of the Consumer Protection from Unfair Trading Regulations 2008, which ban various types of misleading price indication. The Advertising Standards Authority also takes breach of the guidance as evidence of breach of the CAP Codes.

Among the principles set out in the guidance are that:

  • Multi-buy offers, such as “buy one get one free”, should not be used unless they genuinely give the consumer better value because of the offer, which will not be the case where better value was being offered before the volume promotion.
  • Reduced-price promotions (“was £2, now £1”) may be misleading or unfair if the price comparison is made for a materially longer period than the higher price was offered.

Which? reviewed pricing for more than 450 products. Among others, it found that:

  • Iceland were offering a multibuy offer of Kellogg’s Crunchy Nut at “2 for £4”, even though they had offered individual packs of the same product at £1.49 each just a week earlier.
  • Asda had offered one-litre packs of Wall’s Carte D’Or Strawberry Ice Cream as “was £3.50 now £2”, despite the product having been previously sold at £2 for more of the year than at £3.50.
  • Morrisons promoted Cathedral City Mature Cheddar Cheese (350g) as “was £3.50 now £2” during the week of 17 September 2018, but the product was actually available for £2 the month before.

Which? asked the supermarkets to comment. Iceland said it intended to review its promotional calendar, incorporating the findings by Which?, and Asda disagreed with the suggestion that their offers are misleading.

Consumer pricing has been a hot topic for Which? and the CMA for some time, and that interest is clearly continuing. This news should serve as a reminder to traders, especially large multiple retailers, to make sure their pricing practices are in order. Investigations such as this are widely reported and can attract considerable negative press coverage. Further, breaches of the pricing guidelines can constitute breaches of the CAP Codes, resulting in upheld ASA complaints, or of the Consumer Protection from Unfair Trading Regulations, leading to potential court proceedings, with the possibility of civil or even criminal liability.

If you are concerned that your consumer pricing may not be compliant, get in touch with your usual CMS contact or with Tom Scourfield or Stuart Helmer.