The CMA has recently asked a number of supermarkets to review their pricing and promotional practices.
The CMA’s action in this area follows a super-complaint made by Which? in April 2015. The CMA concluded that supermarkets generally take compliance with consumer law seriously. However, it will work with supermarkets to ensure that “was/now” offers (i.e. a promotion by reference to a previous price) and multi-buy deals (i.e. a promotion by volume) are more transparent.
The CMA worked closely with Asda in particular, which has agreed to revise its business rules to ensure that:
- the “now” price is advertised for a shorter period than the “was” price existed for
- multi-buy offers will represent better value than purchasing a single product alone
- “was/now” promotions do not immediately follow multi-buy offers
The changes aim to avoid customers being misled, helping them to understand whether a discount is genuine and so make informed shopping decisions. The CMA has also made a submission in response to the Chartered Institute of Trading Standards’ consultation on revisions to its Pricing Practices Guide. In addition, following a recommendation from the CMA, the Department for Business, Innovation and Skills (BIS) will consult on proposals relating to improving unit pricing for groceries.
This is another regulatory intervention into supermarket practices, following the recent decision of the Groceries Code Adjudicator that Tesco had breached the Groceries Supply Code of Practice, which aims to protect suppliers when dealing with big supermarkets. The decision is arguably the most significant regulatory development in the groceries sector since the introduction of the Code, and contains various lessons which suppliers and retailers should both be aware of.
We produced tailored guides to that decision for suppliers and retailers, which explain the decision’s key implications and set out our top 10 tips on how to ensure you comply with the Code (if you’re a retailer) or make the most of the opportunities it presents (if you’re a supplier).