Supermarkets are well within their rights to fight the pricing ‘super-complaint’ - May 2015

Consumer group Which? on Tuesday (21 April), issued a ‘super-complaint’ accusing supermarkets of deliberately ‘misleading’ and ‘confusing’ consumers out of 100s of millions of pounds. But Nick Miller, Head of FMCG at supply chain consultancy Crimson & Co, argues that the supermarkets are not in the wrong. Far from it.

Earlier this week the consumer group used its legal powers under the Enterprise Act 2002, to file a complaint with the Competition and Markets Authority (CMA), regarding what it believes to be ‘confusing,’ ‘dodgy’ and ‘misleading’ supermarket pricing tactics, that could potentially harm consumer interests.

The 24-page dossier took seven years to compile and is currently with the CMA, which has 90 days to respond. Nick states that the accusations made by Which? exaggerate pricing and promotional tactics, and that supermarkets are perfectly entitled to dispute the claims:

‘The supermarkets are well within their right to fight the allegations made against them by Which? When it comes to food retail the UK is one of the most competitive markets, and is able to afford consumers some of the lowest prices on goods across the whole of the EU.

‘As a nation the UK has always been very accepting of competitive pricing and promotional offers.  Having a high-base price, which is easy to discount, is a fairly commonplace practice. Consumers enjoy seeing stickers on products saying 30% off, even when they know it is simply reduced to a reasonable price – they accept it as part of the retail experience.’

Nick said: ‘Another key factor driving this debate is the growth of discounted supermarket chains. Retailers like Aldi and Lidl tend to have everyday lower prices rather than promotional offers. The result of this is intensifying the pressure on supermarket chains like Sainsbury’s and Tesco, which recently posted the biggest loss in its corporate history to the tune of £6.4bn – a key reason for this the retailer admitted, was failing to keep up with the growing pace of discounted retailers.

‘The quality of the produce, as well as continually low prices keeps consumers visiting discount retailers. As a result, the big four supermarkets (Tesco, Asda, Sainsbury’s and Morrisons) are struggling to cope as consumers vote with their feet and wallets, and that’s why we are seeing this heavy reliance on promotional pricing. Supermarkets are perfectly entitled to do this and unless there are any serious breaches when it comes to advertised promotional prices, we are unlikely to see legislation change anytime soon.’

 

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