Eight of the UK’ biggest supermarkets have signed up to a set of principles to ensure consumers are not “misled” by claims on special offers and promotions, following an investigation by the Office of Fair Trading.
The regulator launched its probe in February to examine concerns that shoppers could be “confused” by the way prices are displayed, advertised and promoted in the UK’s £163.2bn grocery sector.
Tesco, Morrisons, Sainsbury’s, Marks & Spencer, Co-op, Lidl, Aldi and Waitrose have agreed to adopt the OFT’s voluntary code – which is not legally binding - designed to ensure that promotions are “fair and meaningful” for consumers. But Walmart-owned Asda, the UK’s second-biggest supermarket, has controversially not signed up to the watchdog’s principles.
Clive Maxwell, the OFT’s chief executive, said: ‘Household budgets across the country are under pressure and shoppers should be able to trust that special offers and promotions really are bargains.”
The principles cover claims, such as “Was £3, Now £2”, “Half Price” and “bigger pack, better value”. But there is a significant difference on the length of time an offer can be called one, as the OFT’s principles state that prices “should be presented as discounts for the same or less time than the product was initially sold at the higher price”.
This contrasts with the Government’s current pricing practice guidelines, which state that before a price is reduced in a sale, the product must have been sold at a higher price for 28 consecutive days in that store within six previous months.
For example, this means that a supermarket signed up to the OFT’s latest principles may have previously sold burgers at £3 for one month and then slashed the price to £2 but continued to use the “was £3, now £2” sticker for three months during the summer barbecue season. But under the new voluntary principles, they will now have to remove the promotional tag before the expiry of one month, following the price reduction, if they continue to sell the burgers at £2.
The OFT said supermarkets had not broken the law nor were they engaging in “misleading” promotions but it did identify “what appeared to be inconsistency in the way the law was being interpreted and applied” in the industry.
But retail experts are sceptical about whether today’s announcement will make much difference in an industry that has always blitzed consumers with promotions. Bryan Roberts, the insights director at Kantar Retail, said: “I think even with a new voluntary code and greater regulation it will still be incredibly confusing for consumers to ascertain what value for money looks like and what is a bargain and what is not. Even if there is a lot more transparency, most shoppers will still need a calculator to work their way around a store.”
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Asda said: “Our decision not to be included in the OFT announcement today is not a ‘closed door’ on this discussion. We welcome the work carried out by the OFT and are taking time to consider its recommendations in detail.”
