Announcing its response to a Competition & Markets Authority investigation into a so-called super-complaint by Which?, the business department said that it would launch a consultation on how to make pricing simpler, reports The Times.
The consumer group made the complaint in April after a lengthy investigation into the pricing of 150,000 items found “dodgy multibuys, shrinking products and baffling sales offers”, which were making it “virtually impossible for people to know if they are getting a fair deal”.
Shoppers spend about £115 billion a year on groceries and toiletries — 14 per cent of household expenditure. About 40 per cent of that is on promotions, and Which? has estimated that, even if a small proportion of these are misleading, the average household could be losing more than £40 a year.
The CMA’s subsequent report, published in July, did not find systemic problems and found that generally retailers were “taking compliance seriously to avoid such problems”.
However, it said that, where it had identified examples of potentially misleading and confusing practice, it would be taking action, adding: “We plan to engage with retailers in the coming weeks to address these issues.”
It said that more could be done to reduce complexity to make it easier for shoppers to compare prices.
Nick Boles, the consumer minister, said that the government took the CMA’s findings and recommendations seriously and he warned the industry that it was “important that the supermarkets do too”.
He added: “Shoppers need to be able to get the best deal and make comparisons easily so we will look at how we can make information on price as clear and as simple as possible.”
The Chartered Trading Standards Institute responded by launching a consultation on the Pricing Practices Guide to clarify how the legislation applies to promotional activity — another key recommendation made by the CMA.
The Which? super-complaint, dismissed by Malcolm Walker, the Iceland boss, in an interview with Retail Week in July, identified a long list of dubious practices including:
Confusing and misleading special offers.
A lack of easily comparable prices because of the way unit pricing is done.
Shrinking package sizes without any corresponding cut in the price.
Misleading use of price matching with rival supermarkets.
The use of a higher price for only a short period before the product goes on promotion for much longer — so-called high/low pricing.
Although the CMA disagreed with Which?’s conclusion that there was “a prolific and systemic problem with pricing”, and insisted that “supermarkets want to comply with the law”, it conceded that there were “still areas of poor practice that could confuse or mislead shoppers”.
The British Retail Consortium, which looks after the interests of the big retailers and has never accepted “the core implications” of the super-complaint, welcomed the launch of a fresh consultation.
Tom Ironside, the BRC’s director of business and regulation, said: “We are very pleased that the government has recognised that the CMA report did not find any evidence of systemic issues, as we said previously it would not.
“We will be engaging positively with the government’s consultation on unit pricing, an area where we have been engaging positively with stakeholders for some time now.”
