LONDON – Britain’s competition regulator on July 26 said its ongoing review of supermarket loyalty prices was unlikely to identify widespread evidence of promotions that mislead shoppers.
Loyalty schemes have proved hugely successful for the UK’s biggest supermarkets, offering significantly lower prices for members. The vast majority of customers now use the schemes and an increasing number of products are covered by them.
The Competition and Markets Authority (CMA) launched a review in January to consider the impact on shoppers of the loyalty scheme pricing used by many UK supermarkets, including market leader Tesco and No. 2 Sainsbury’s, which offers cheaper prices only to loyalty card members.
It said a full report on its findings would be published in November.
The watchdog considered whether there are pricing practices that indicate the non-loyalty, or non-member, price may have been artificially inflated to make the loyalty price appear misleadingly attractive.
It looked at what happens to prices before, during, and after a product goes onto a loyalty price promotion.
“Our analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest we are unlikely to identify widespread evidence of loyalty promotions that mislead shoppers in this way,” the CMA said.
But the regulator said it had seen examples of retailers alternating between so-called “was /now” promotions available to all shoppers and loyalty price promotions.
“This raises questions as to what the ‘regular’ price is for the product and therefore whether the claim saving for the ‘was /now’ promotion is genuine,” the CMA said, adding it was looking further into this issue.
Over 22 million UK households have a Tesco Clubcard and over 80 per cent of Tesco’s UK sales involve them.
Tesco, which has a 27.7 per cent share of the UK grocery market, currently offers over 8,000 Clubcard Prices deals each week, while Sainsbury’s, which has a 15.3 per cent share, has rolled out Nectar Prices to about 7,000 products.
Shares in Tesco and Sainsbury’s were both up 0.2 per cent in early trading.
In 2023, the CMA ruled that Britain’s high food price inflation had not been driven by weak retail competition, vindicating supermarkets’ rejection of claims they had profiteered during a cost of living crisis.
Separately, on July 26, the CMA said UK drivers were still paying too much for road fuel. REUTERS