The UK competition regulator has finally concluded its investigation into supermarket loyalty scheme pricing, dismissing claims that the strategy is “murky and confusing”, as well as concerns over the use of shoppers’ personal data.
The Competition & Markets Authority launched the probe in January, as part of a wider programme to help tackle cost of living pressures in the groceries sector.
In an interim report, published in July, the CMA admitted it had yet to find “widespread evidence” customers were being misled.
However, in August, Which? racheted up the pressure by publishing the findings of its own investigation, which analysed the pricing history of almost 12,000 products at health and beauty retailers and supermarkets, including Boots, Superdrug, Co-op, Waitrose, Tesco, Sainsbury’s, Morrisons.
At the time, Which? retail editor Ele Clark said: “While the discounts can look impressive, many shoppers are growing suspicious of non-member prices that seem high.
“We looked at the pricing history of thousands of products and found that, while the majority of discounts were not misleading, there were some questionable non-member prices and some examples that looked like an outright rip-off.”
In its final report the CMA said most shoppers (69%) think loyalty pricing offers good savings, even though a significant proportion (40%) say they do not trust loyalty prices are a genuine saving on the usual price. Strikingly, over half of shoppers (55%) think that the price for non-members during loyalty promotions is higher than the usual selling price.
However, the CMA said: “The overwhelming majority (92%) of around 50,000 products on a loyalty dual price promotion we analysed offer genuine savings on the usual price of the product at that retailer.
“We found very limited evidence of price changes which could indicate that supermarkets may have inflated prices to make their loyalty prices appear misleadingly attractive.
“Our findings should provide reassurance to shoppers: in the majority of cases those without a loyalty scheme membership are paying the same price during a loyalty promotion as they do in the weeks both before and after it.”
The regulator also found that concerns about personal data are not preventing many shoppers from joining or using loyalty schemes, including to access loyalty prices.
The report stated: “Only 7% of those surveyed who are not members of any supermarket loyalty scheme where they regularly shop for groceries, said this was due to personal data concerns. We have not seen evidence of consumer law concerns in relation to supermarkets’ collection and use of personal data.”
The CMA went on to outline its advice about how grocery retailers can stay on the right side of consumer law when offering loyalty price promotions.
The report concluded: “We have written to all supermarkets that use loyalty pricing to advise them to review their practices in line with our advice and, where necessary, take action to ensure all of their promotions comply with consumer law, including when alternating between loyalty promotions and other forms of promotions such as was/now promotions.
“We are also calling on supermarkets to consider if they could do more to make sure that certain shoppers – such as those without smartphones and under-18s – are able to join and make use of loyalty schemes.”
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