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Supermarkets clean up promotions

27 April, 2016

The Competition and Markets Authority (CMA) has asked a number of supermarkets to review their promotions and agreed specific changes with Asda.

The CMA has worked with supermarkets and Trading Standards Services to ensure that shoppers can have more confidence they are getting a good deal.

Which? raised concerns about supermarket pricing and promotional practices in a super-complaint in 2015. The CMA found that supermarkets generally have a good awareness of consumer law and take compliance seriously.

However, it committed to work with supermarkets to ensure that ‘was/now’ offers (reference price promotions) and multi-buy deals (volume promotions) are genuine, so shoppers can see when they are getting a real discount and make informed shopping decisions.

The CMA met with a number of supermarkets and asked them to work with their Trading Standards Services partners to review their pricing and promotional practices. The CMA said all of the supermarkets engaged constructively with it and it now expects them to review their practices and make any necessary changes to ensure consumers can be confident they are getting a good deal.

The CMA had particular engagement with Asda in relation to specific areas of concern. While the CMA has not made any findings against Asda, Asda has given a commitment that it will change the way it operates ‘was/now’ and multi-buy deals. The CMA said it welcomed Asda’s commitment to change its promotional practices and strengthen its compliance controls.

The revised business rules it is implementing will ensure that:

• ‘now’ prices will not be advertised for longer than the ‘was’ price applied, ensuring they are a meaningful comparison

• multi-buy offers will represent better value than a single product before the offer

• multi-buy offers will not be immediately followed by ‘was/now’ promotions, so it will be easier for shoppers to tell what is a good offer

The CMA said the changes would give shoppers increased confidence that they were getting a genuine discount and help them to compare the discounted price with the previous higher price.

Michael Grenfell, CMA executive director, Enforcement, said: “The CMA’s examination of the market, following the super-complaint, found that supermarkets generally take compliance seriously, but there were some promotional practices that could mislead shoppers.

“We welcome the commitment we have received from Asda as well as the engagement from other supermarkets, and expect them all to ensure that their practices are not misleading and that shoppers are better informed and able to choose the products that most suit their needs.”

Alex Chisholm, CMA chief executive, added: “This draws the CMA’s follow-up work to the super-complaint to an end. In addition to our work with Asda and the other retailers, we are pleased to see that our recommendations concerning the key legislation and guidance in this area are being taken forward. The Chartered Institute of Trading Standards is currently working on a revision to the Pricing Practices Guide and the Department for Business, Innovation and Skills (BIS) has indicated that it intends to consult, following our recommendation that it review the legislation and guidance on unit pricing.”

Asda has started making changes to the operation of its ‘was/now’ and multi-buy promotions. These will be fully implemented by August 2016 and the CMA will check how they are working six months later.





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