Chartered Trading Standards Institute
Supermarket loyalty card prices not as good as they seem, Which? finds
Tesco and Sainsbury's are using potentially dodgy tactics on some of their loyalty offers which can give the impression that savings are more substantial than they really are, a new Which? investigation suggests, as the consumer champion finds some customers are being denied access to member discounts altogether.
Which? has shared its findings with the Competition and Markets Authority (CMA) and asked them to look at whether supermarkets could be hiking their ‘regular' prices to make loyalty scheme customers feel they are getting a discount.
As part of the investigation into retailers' growing use of promotions attached to loyalty card schemes, the consumer champion analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury's and tracked their pricing history back six months. It found that around a third (29%) of the member-only promotions were at their so-called ‘regular' price, less than 50 per cent of the six month period.
Among the potentially dodgy deals uncovered by Which?'s investigation, Sainsbury's advertised a jar of Nescafé Gold Blend Instant Coffee (200g) for £6 with a Nectar card – a saving of £2.10 on the ‘regular' price of £8.10. But the regular price had also been £6 at Sainsbury's until it went up to £8.10 just two days before the Nectar price launched. Which? also found the ‘regular' Sainsbury's price was much higher than at other supermarkets. At Asda, the same jar was £7, while at Morrisons, Ocado and Waitrose it was £6, £5.99 at Tesco and £5.49 at Lidl.
Similarly, at Tesco Which? found Heinz Salad Cream (605g) with a Clubcard price of £3.50 and a ‘regular' price of £3.90 however its regular price had been £2.99 for several weeks before it was increased to £3.90 – just 22 days before the Clubcard promotion. It had been at its ‘regular' price for only 25 days out of 183 (14% of the previous six months).
Which?'s research identified three key problems which centred around the ‘regular' price quoted for products on offer to customers with loyalty cards. This included regular prices that had been changed right before the loyalty card promotion, regular prices that were far more expensive than at other supermarkets and regular prices that were only available for a very short amount of time.
Which? also spoke to shoppers about their thoughts on loyalty pricing. While many were content with the deals on offer, others told the consumer champion they thought they were being ripped off. One shopper told Which?: “I agree that these attract customers like me, but feel like they raise the prices anyway and then members' prices become the normal price it should be.”
As well as being clear and not making unfair price comparisons, current regulator guidance dictates that it is important that if a proposed pricing practice explicitly or by implication indicates a saving against another price, the quoted saving is genuine and can be trusted by shoppers.
Overall, Which? found a third of the products at Sainsburys (34% of 71 products) were the ‘regular' price less than half the time over the previous six months. At Tesco, it was a quarter of the products Which? looked at (24% of 70 products).
Another significant problem that Which? found in its investigation, is that not all customers are able to sign up to loyalty schemes in the first place. There are often age and address-based restrictions as well as digital requirements which mean those who are too young, do not meet the address requirements or do not have access to the technology needed, are not able to access discounts that would previously have been available to everyone.
This means that vulnerable groups, such as young parents and carers, school children buying lunch and those in temporary accommodation could be excluded from benefiting from the lower prices offered to members and may be paying inflated normal prices given the wider pricing practices that Which? uncovered. One person told Which?: “I don't mind member-only pricing from a selfish point of view, but think it's very discriminatory and morally questionable.”
Which?'s findings suggest that Tesco and Sainsbury's are sometimes offering customers deals that do not necessarily constitute a genuine saving. Which? has shared its findings with the regulator so that as promotional schemes rapidly proliferate between retailers, any pricing tactics which make loyalty discounts look more attractive are properly scrutinised.
Sue Davies, Which? Head of Food Policy, said:
“It's not surprising that shoppers are questioning whether supermarket loyalty card prices are really a good deal, as our investigation shows that up to a third of loyalty offers at Tesco and Sainsbury's are not all they're cracked up to be.
“As member-only pricing continues to grow, the sector, its pricing practices and who is eligible for membership needs to be properly scrutinised so that all shoppers – including society's most vulnerable – can benefit and no one is misled into buying things they wouldn't have usually bought or which isn't quite the deal they believe it to be.
“Which? is calling on supermarkets to make sure that their loyalty card prices don't mislead and for the regulator to look more closely at this growing trend towards dual pricing. There is also the important issue of whether it is right for certain groups to be excluded from member-only schemes.”
- The Which? Investigation looked at Tesco and Sainsbury's, as these are the UK's two biggest supermarkets and the most established loyalty schemes with the most products included.
- Between them, Tesco and Sainsbury's share 42% of the UK grocery market
- Investigation included price tracking of 141 member-only prices at Tesco and Sainsbury's over the period of 6 months (Dec 20, 2022 to June, 2023)
- Which? found the average saving on a member-only offer is 21%. However, shoppers are unlikely to only buy groceries with loyalty prices. When Which? looked at a basket of popular everyday groceries that make up an average shop, it found the overall average saving with a loyalty card was 6.4% at Tesco and 2% at Sainsbury's (although Sainsbury's has since increased the number of Nectar Prices on offer, so the saving may be greater now).
- Nationally representative survey on supermarket loyalty schemes of 2000 UK adults conducted by Opinium on behalf of Which? between 07 – 11 July 2023
- 20% of those who'd noticed member-only pricing said it had led them to shop at their supermarket more frequently than before.
- 25% of respondents said their stores use of their data was unclear
- 69% said they are willing to exchange their data for discounted prices
- 26% said they are uncomfortable knowing supermarkets collect detailed data via schemes
Loyalty card eligibility info:
- You must be 18 or over to be a member of Asda, Iceland, Lidl, M&S, Sainsbury's, Tesco, and Waitrose loyalty schemes, and 16 or over at Morrisons. Co-op is the only major supermarket currently offering a scheme for under-16s. Sainsbury's does let under-18s collect points using a parent or guardian's account.
- Members must also be a UK resident to join the Iceland, M&S, Morrisons, Sainsbury's, Tesco and Waitrose schemes
- Some schemes also require an email address or the ability to download an app.
Tesco said all its Clubcard Price promotions followed strict rules, including looking at how they compared against prices at other supermarkets, to ensure they represented genuine value and savings. It said these rules had been endorsed by Tesco's Trading Standards Primary Authority.
|News & Policy
|Trading Standards Professional
|CTSI for Business
|Leaving the EU
|Working with Government
Latest News from
Chartered Trading Standards Institute
CTSI and partners celebrate National Apprenticeship Week05/02/2024 15:25:00
The Chartered Trading Standards Institute (CTSI), Chartered Institute of Environmental Health (CIEH) and Institute of Licensing (IoL) are celebrating National Apprenticeship Week by showcasing the routes available to apprenticeships.
CTSI welcomes clarity and action from government to tackle youth vaping30/01/2024 10:25:00
The Chartered Trading Standards Institute (CTSI) has welcomed the announcements from the Department for Health and Social Care (DHSC) to ban disposable vapes and to strengthen the tools and resources for Trading Standards to make this achievable.
CTSI responds to Government’s consultation response to make shopping online safer for UK consumers25/01/2024 14:30:00
The Chartered Trading Standards Institute (CTSI) has welcomed the latest update by the Department for Trade and Business (DBT) that lays out plans to strengthen the provisions in the Digital Markets, Competition and Consumer Bill (DMCC Bill).
Home builders and consumers to benefit from robust and consistent service standards across UK new-builds16/01/2024 09:20:00
January 2024 marks the implementation of the updated Consumer Code for Home Builders’ and Consumer Code for New Homes’ Codes of Practice, which will deliver better consumer protection during the house purchase process and after-sales support across new-builds in the UK.
Almost all home maintenance websites do not comply with the law22/12/2023 12:05:00
CTSI launches new Online Audit to clean up E-commerce.
CTSI urges Government to reconsider draft funding settlement for Local Authorities20/12/2023 12:15:00
The Chartered Trading Standards Institute (CTSI) has urged the Government to reconsider its draft funding settlement for Local Authorities, with concerns that it may lead to further cuts to an already depleted Trading Standards service and result in increased risks to local communities.
Banned imported American candy with huge child appeal and worrying side effects floods the UK11/12/2023 14:20:00
The Chartered Trading Standards Institute (CTSI) has issued a serious warning to parents this Christmas around unauthorised ingredients contained in imported American sweets and fizzy drinks with known links to hyperactivity and cancer in children that are readily accessible across UK highstreets.
UK government to rapidly progress plans to create a smokefree generation06/12/2023 13:05:00
Plans to introduce the most significant public health intervention in a generation and phase out smoking are progressing at pace, as the government’s consultation closes today.
Hammersmith and Fulham Trading Standards Officer puts criminals behind bars01/12/2023 17:20:00
Doug Love, Lead Practitioner in Trading Standards at Hammersmith and Fulham Council’s Trading Standards has received the Intellectual Property Award at the Chartered Trading Standards Institute (CTSI) annual Hero Awards which celebrates outstanding achievements in consumer protection.