The CMA today published its response to a so-called super-complaint submitted by Which? in April. The response identifies potentially confusing and misleading pricing and promotional practices and contemplates enforcement action in some isolated cases, but it also blames a lack of clarity surrounding existing regulations for some of the practices identified and finds no evidence of significant consumer harm in relation to other concerns flagged by Which?.
Confusing and misleading special offers
Which? highlighted a number of examples of special offers that could mislead or confuse consumers, including:
- 'Was/now' offers where the item in question was sold at the higher retail price for a shorter period of time than the lower ('now') retail price;
- Multi-buy offers where the retailer increases the per-unit retail price of an item immediately before including it in a multi-buy offer;
- Larger pack sizes or 'value packs' where the consumer could obtain better value by purchasing an equivalent volume in smaller/individual packs.
The CMA found evidence of some promotional practices which have the potential to mislead consumers and breach the Consumer Protection from Unfair Trading Regulations 2008. In particular, the CMA expressed concern that some retailers do appear to have sold items at retail 'now' prices for periods of time that were significantly longer than the period during which the original ('was') price applied. Nonetheless, the CMA found that the concerning practices are not widespread and may be limited only to certain businesses. The CMA expects to take further action in respect of certain individual businesses to bring about any necessary changes to current practices and has recommended clarifying existing guidance.
Difficulties associated with unit pricing
Which? highlighted a number of difficulties arising from the ways that some retailers interpret the requirement to advertise both a selling price and a unit price, which limit consumers' ability to compare retail prices effectively. In particular, the complexity of current rules has led to unit prices for comparable items being presented in very different formats. Which? identified, for example, that the on-shelf advertised unit price for some sauces is presented as a price per 100ml, whereas the unit price for other sauces on the same shelf is presented as a price per 100g.
The CMA's investigation confirmed that these inconsistencies were widespread and that these may be the result of the lack of clear guidance. To remedy these concerns, the CMA recommends that the Department for Business Industry and Skills considers undertaking further research about how consumers use unit prices and that it review current legislation and guidance to give retailers' greater clarity in this area. The CMA also published, alongside its response to the super-complaint, advice for consumers about the use of unit pricing and it called on Which? and other organisations to play a greater role in educating consumers in future.
Reductions in pack sizes
Which? was concerned that pack sizes had sometimes become smaller without any corresponding decrease in the retail price. However, the CMA concluded that this practice would be constrained both by the costs to manufacturers associated with changing pack sizes and by the risk of consumers switching away in response to perceived poor value for money. The CMA also found that consumers are currently presented with adequate information about changes to pack size and that, whilst a retailer or manufacturer could conceivably try to 'mask' such a change, the CMA had seen no evidence of this in practice.
Price match schemes
Which? also invited the CMA to review the use of price match schemes whereby retailers claim to match retail prices available in competitor stores. Which? noted that different retailers approach price match schemes differently, for example with regard to whether own-brand items should be included. However, the CMA found no evidence that these schemes cause significant consumer harm and was not of the view that a 'one size fits all' approach to price match schemes would necessarily lead to the best outcome for consumers. Nonetheless, the CMA identified scope for some retailers to present information to consumers more clearly in relation to their price match schemes and it will engage with individual businesses where appropriate to improve those practices.
Super-complaints can only be made by certain designated consumer bodies and they can be an effective mechanism for focusing attention on particular concerns affecting consumer sectors and bringing about changes in the industry, because the CMA is required to respond to such complaints within a statutory 90 days. On this occasion the CMA has not identified widespread practices that are causing significant harm to consumers but it has flagged concerns with existing regulations and guidance which it will fall to the Department for Business Industry and Skills, amongst others, to address in future.