Supermarkets accused of misleading shoppers on savings with member prices
Consumer group Which? has accused Tesco and Sainsbury's of hiking prices of some products to make loyalty scheme customers feel they are getting a bigger discount.
Which? says the supermarket chains are using "potentially dodgy tactics" which give shoppers the impression that savings they make when buying items and products are much more than they really are. Tesco and Sainsbury's deny these claims.
Which? analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s and tracked their pricing history back six months. It found that around a third (29%) of the member-only promotions were at their so-called "regular" price, less than 50% of the six month period.
Which? found that Sainsbury’s advertised a jar of Nescafé Gold Blend Instant Coffee (200g) for £6 with a Nectar card. This was apparently a saving of £2.10 on the regular price of £8.10. But the regular price had also been £6 at Sainsbury’s until it went up to £8.10 just two days before the Nectar price launched.
Which? also found the regular Sainsbury’s price was much higher than at other supermarkets. At Asda, the same jar was £7, while at Morrisons, Ocado and Waitrose it was £6, £5.99 at Tesco and £5.49 at Lidl. At Tesco, it found Heinz Salad Cream (605g) with a Clubcard price of £3.50 and a regular price of £3.90. However its regular price had been £2.99 for several weeks before it was increased to £3.90 - just 22 days before the Clubcard promotion. It had been at its "regular" price for only 25 days out of 183 - or 14% of the previous six months.
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Overall, Which? found a third of the products at Sainsbury's, 34% of 71 products, were the regular price less than half the time over the previous six months. At Tesco, it was a quarter (24%0 of the 70 products it looked at.
The "key problems" highlighted by the consumer group all centred around the regular price given to products on offer to customers with loyalty cards. This included:
- Regular prices that had been changed right before the loyalty card promotion
- Regular prices were far more expensive than at other supermarkets
- Regular prices that were only available for a very short amount of time
Another issue Which? said it found in its investigation, was that not all customers are able to sign up for loyalty schemes in the first place. There are often age and address-based restrictions as well as digital requirements which mean those who are too young, do not meet the address requirements or do not have access to the technology needed, are not able to access discounts.
This means that vulnerable groups, such as young parents and carers, school children buying lunch and those in temporary accommodation could be excluded from benefiting from the lower prices offered to members and may be paying the more expensive normal prices.
Which? has shared its findings with the Competition and Markets Authority (CMA) and asked them to look at whether supermarkets could be hiking their regular prices to make loyalty scheme customers feel they are getting a discount.
Sue Davies, Which? head of food policy, said: “It’s not surprising that shoppers are questioning whether supermarket loyalty card prices are really a good deal, as our investigation shows that up to a third of loyalty offers at Tesco and Sainsbury’s are not all they're cracked up to be.
“As member-only pricing continues to grow, the sector, its pricing practices and who is eligible for membership needs to be properly scrutinised so that all shoppers - including society’s most vulnerable - can benefit and no one is misled into buying things they wouldn’t have usually bought or which isn’t quite the deal they believe it to be. Which? is calling on supermarkets to make sure that their loyalty card prices don’t mislead and for the regulator to look more closely at this growing trend towards dual pricing. There is also the important issue of whether it is right for certain groups to be excluded from member-only schemes.”
In response to Which? investigation a Sainsbury's spokesperson said that due to inflation, many products had increased in price over the past six months and Sainsbury’s own inflation rate had been behind many of its competitors.
A Sainsbury’s spokesperson said: “Nectar Prices offer our customers the opportunity to make genuine savings across 5,000 products. Which? fails to recognise that base prices have been increasing throughout the year due to inflation. Our promotional rules around Nectar Prices are informed by the guidance from Trading Standards. The Nescafe Gold example demonstrates Which?’s flawed methodology as the claim that the ‘regular’ price was £6 is untrue. The base price of this item has been £8.10 since December 2022 and £6 was a promotional price throughout this year, including on Nectar Prices when it launched in April.“
A Tesco spokesperson told the Mirror the non-member prices that Which? had used in its examples were in line with the usual prices charged by other supermarkets during that time. They also said that its Clubcard scheme was just one way it is working to help shoppers save money.
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They said: “We know that having low prices on the products we sell is really important to our customers right now, which is why we have more than 8,000 weekly deals on Clubcard Prices, offering customers potential savings of up to £351 a year – all while collecting Clubcard points that can be put towards groceries and fuel, or doubled in value with our Reward Partners.
“All our Clubcard Price promotions follow strict rules, including considering how they compare against prices in the market, to ensure they represent genuine value and savings for our Clubcard members. These rules have been endorsed by our Trading Standards Primary Authority. As Which? reported recently, Tesco was the cheapest of all the major supermarkets when a Clubcard was used – and was extremely competitive when compared with the limited range discounters.”
Tesco also noted that their Clubcard scheme, like other loyalty schemes, did have a small number of eligibility rules in place. These were that customers needed to be 18 to sign up and hold a UK address in order to apply for one.
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