Groceries promotions to be clearer for shoppers

27 Apr 2016 07:08 AM

The CMA has asked a number of supermarkets to review their promotions and agreed specific changes with Asda.

The Competition and Markets Authority (CMA) has worked with supermarkets and Trading Standards Services to ensure that shoppers can have more confidence they are getting a good deal.

Which? raised concerns about supermarket pricing and promotional practices in a super-complaint in 2015. The CMA found that supermarkets generally have a good awareness of consumer law and take compliance seriously. However, it committed to work with supermarkets to ensure that ‘was/now’ offers (reference price promotions) and multi-buy deals (volume promotions) are genuine, so shoppers can see when they are getting a real discount and make informed shopping decisions.

The CMA has met with a number of supermarkets and asked them to work with their Trading Standards Services partners to review their pricing and promotional practices. All of these supermarkets have engaged constructively with the CMA, which now expects them to review their practices and make any necessary changes to ensure consumers can be confident they are getting a good deal.

The CMA has had particular engagement with Asda in relation to specific areas of concern. While the CMA has not made any findings against Asda, Asda has given a commitment to the CMA that it will change the way it operates ‘was/now’ and multi-buy deals. The CMA welcomes Asda’s commitment to change its promotional practices and strengthen its compliance controls. The revised business rules it is implementing will ensure that:

• ‘now’ prices will not be advertised for longer than the ‘was’ price applied, ensuring they are a meaningful comparison
• multi-buy offers will represent better value than a single product before the offer
• multi-buy offers will not be immediately followed by ‘was/now’ promotions, so it will be easier for shoppers to tell what is a good offer

Once implemented, these changes will give shoppers increased confidence that they are getting a genuine discount and help them to compare the discounted price with the previous higher price.

Michael Grenfell, CMA Executive Director, Enforcement, said:

The CMA’s examination of the market, following the super-complaint, found that supermarkets generally take compliance seriously, but there were some promotional practices that could mislead shoppers.

We welcome the commitment we have received from Asda as well as the engagement from other supermarkets, and expect them all to ensure that their practices are not misleading and that shoppers are better informed and able to choose the products that most suit their needs.

Alex Chisholm, CMA Chief Executive, added:

This draws the CMA’s follow-up work to the super-complaint to an end. In addition to our work with Asda and the other retailers, we are pleased to see that our recommendations concerning the key legislation and guidance in this area are being taken forward. The Chartered Institute of Trading Standards is currently working on a revision to the Pricing Practices Guide and the Department for Business, Innovation and Skills (BIS) has indicated that it intends to consult, following our recommendation that it review the legislation and guidance on unit pricing.

Asda has already started making changes to the operation of its ‘was/now’ and multi-buy promotions. These will be fully implemented by August 2016 and the CMA will check how they are working 6 months later.

Notes for editors

1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
2. The CMA’s work with supermarkets follows its response to a super-complaint made by Which? on 21 April 2015 regarding pricing practices in the groceries market.
3. The CMA has not made a finding on whether supermarkets’ pricing and promotional practices have breached consumer law. The CMA or other enforcers may take enforcement action if there is evidence that pricing and promotional practices breach consumer law. Only a court can conclude whether a particular practice infringes the law.
4. The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) came into force on 26 May 2008 and implemented the Unfair Commercial Practices Directive 2005/29/EC into UK law. The CPRs contain a general prohibition against unfair commercial practices, and specific prohibitions against misleading actions, misleading omissions and aggressive commercial practices. The CPRs are enforceable through the civil and criminal courts.
5. Trading Standards Services partners carry out responsibilities in relation to a particular business. Businesses can choose to form a partnership with a local Trading Standards Services (known as a primary authority). The primary authority scheme is a statutory scheme, administered by the Better Regulation Delivery Office within BIS. One forum in which primary authority officers meet is the Primary Authority Supermarkets Group.
6. BIS welcomed the CMA’s response to the super-complaint and set out some proposals relating to improving unit pricing for groceries, in line with the CMA’s recommendations.
7. The CMA has also made a submission to the Chartered Trading Standards Institute’s consultation on the revised draft Pricing Practices Guide (PPG), including to help ensure the final PPG provides guidance on the issues raised in the CMA’s response to the super-complaint.
8. Enquiries should be directed to Simon Belgard (simon.belgard@cma.gsi.gov.uk on 020 3738 6472).