Grocers Face Competition & Markets Authority action after super-complaint

Sky News has learnt that the Competition and Markets Authority (CMA) will on Thursday unveil a series of recommendations aimed at improving the transparency of supermarkets’ pricing activities.

The prospect of some form of competition or consumer enforcement action was still being discussed by the regulator on Wednesday, with a final decision about whether to pursue such a move expected shortly.

However, the CMA will disappoint advocates of even tougher measures such as a full market investigation, according to people briefed on the findings.

“There are still some moving parts and the language could yet get a bit tougher [towards the industry],” one person said.

The CMA will be responding to a so-called super-complaint lodged in April by the consumer group Which?.

Its recommendations will include further bolstering the role of trading standards officials; making on-shelf pricing more legible and consistent across product categories; and tweaking rules covering special offers through a tightening of Consumer Protection Regulations.

A source said the CMA’s own research had found during its 90-day investigation that hundreds of products were the subject of misleading promotions in UK supermarkets.

Which?’s super-complaint accused retailers of creating the illusion of savings through the use of multi-buys, shrinking products and baffling sales offers with 40 per cent of groceries sold on promotion.

The organisation said that consumers could be collectively losing hundreds of millions of pounds if just a small proportion of offers were misleading, adding that it was virtually impossible for people to know if they were getting a fair deal.

Under the Enterprise Act 2002, designated consumer bodies such as Which can file a super-complaint alleging that “any feature, or combination of features, of a market in the United Kingdom for goods or services is or appears to be significantly harming the interests of consumers”.

The CMA has decided that while there are some issues with pricing transparency and special offers, the problem is not sufficiently endemic to justify a full market investigation.

“This is not a report which jumps on the industry’s back,” said an insider.

The CMA is, however, expected to say that it will continue to monitor the areas of concern raised by Which?

Promotions have become more widely used in the supermarket sector over the last 12 months as major retailers like Asda, Sainsbury’s and Tesco have sought to salvage market share lost to discounters such as Aldi and Lidl.

Which? executive director Richard Lloyd said in April: “Despite Which? repeatedly exposing misleading and confusing pricing tactics, and calling for voluntary change by the retailers, these dodgy offers remain on numerous supermarket shelves.”

The CMA and Which? declined to comment on Wednesday.