CMA probe into supermarket loyalty comes to nothing

The Competition & Markets Authority has come under fire for carrying out a “nonsensical” investigation into supermarket loyalty schemes after the regulator admitted it has found “no widespread evidence” customers were being misled.

In an update of on its ongoing probe into pricing, first launched in January, the CMA said it had studied “tens of thousands” of supermarket prices and found little to suggest loyalty promotions were based on bogus savings for customers, though elsewhere its report claimed supermarket fuel prices were still too high.

The CMA has been exploring whether loyalty pricing, such as Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices, have been “misleading” shoppers and whether loyalty prices offered by supermarkets are “genuine promotions” and “as good a deal as presented”. Even so, it said it had found some issues.

The watchdog explained: “In our analysis we have seen examples of retailers alternating between ‘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. We are looking further into this issue.

“We are also comparing a sample of supermarkets’ loyalty prices to those prices charged by other supermarkets at the same time. Particularly given concerns raised by stakeholders, it is valuable for shoppers to have insight into how loyalty prices can compare with prices available elsewhere, including when they are on promotion at other retailers.”

The CMA has commissioned a consumer survey to gauge the impact of loyalty pricing, which it said would form a key part of its next report in November.

“The CMA has been assessing whether the savings on offer through loyalty schemes are genuine,” it said. “The analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest it is unlikely to identify widespread evidence of loyalty promotions that mislead shoppers.”

It said the update should provide shoppers with “reassurance that competition in the groceries sector appears to be effective in bearing down on retail margins”.

BRC CEO Helen Dickinson said: “We welcome the CMA’s update that they have not found widespread evidence of misleading loyalty promotions. Whether it’s everyday value, or loyalty schemes discounts, retailers know they have to demonstrate clear value to attract and retain customers.

“The CMA update once again shows that supermarkets are doing their best to provide great value groceries for their customers. With food inflation now returned to normal levels, fierce competition between retailers is ensuring customers are the big winners from the UK’s supermarket sector.”

However, Shore Capital analyst Clive Black said the report showed the continued investigation by the CMA had been “nonsensical”.

He told The Grocer: “The world and its wife knew that that this was a spurious investigation by an organisation with not enough to do, listening to every moan from everyone and sticking its nose into something that is pretty upfront, transparent, and free,” he said. “Common sense has prevailed, for which there will be a notable sigh of relief.”