Supermarket loyalty prizes offer real savings, regulator rules | Money news

On November 27, 2024By Pranco

Supermarket loyalty programs offer real savings for shoppers, the competition authority has said after an investigation into claims of price manipulation.

The Competition and Markets Authority (CMA) said its research of 50,000 loyalty-priced products found that 92% offered real savings over the usual price.

That’s despite 55% of shoppers thinking ‘regular’ prices were being increased to make loyalty deals more attractive, the report said.

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The watchdog’s report found ‘very little evidence’ that supermarkets were inflating their ‘usual’ prices to make loyalty promotions seem like a better deal, but it did call on companies to increase access to their schemes.

It was asked to conduct research by consumer group Which?.

Which one? had complained that deals were “not all they were cracked up to be”, but chains said the group’s own report on the issue had not taken into account the impact of inflation.

The CMA’s report was published at a time of year when supermarket chains tend to lose market share by offering discounts to retain customers for their Christmas shopping.

However, there is a chance that tight consumer budgets will see only limited benefit this year, as retailers are under pressure to save money and protect profits from looming cost increases arising from the budget.

Major employers, such as grocers, have warned that increases in social security contributions from April will hurt jobs and investment, while inflation has risen back above the Bank of England’s target.

Retail organization, the BRC warned earlier this week that food inflation could soon rise due to rising costs, while the pace of price increases for fresh produce is already accelerating.

George Lusty, interim director of consumer protection at the CMA, said of the pricing research: “We know that many people do not trust loyalty card prices. the shoppers honestly.

“After analyzing tens of thousands of products, we found that almost all loyalty prizes reviewed delivered real savings over the usual price – a fact we hope will reassure consumers across the UK.

“While these discounts are legitimate, our research has shown that loyalty pricing isn’t always the cheapest option, so shopping around is still crucial. By checking a few stores, you can continue to save your hard-earned money.”

The regulator said that while loyalty prices were generally among the cheapest available, people could save an average of 17-25% by buying loyalty price products at the five supermarkets surveyed: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons.

As part of its investigation, the CMA said it has also found no evidence that consumer laws are being broken by the way supermarkets collect and use people’s data when they sign up to a loyalty scheme.

Sue Davies, which one? head of the Department for Food Policy, responded: “Two-tier loyalty pricing has become a common practice among retailers. It is therefore reassuring that the CMA has found that most of the prices it looked at in supermarkets delivered real savings over the usual price .

“However, it highlights that it is worth shopping around as they are not always the cheapest option.

“Which? also looked at prices for thousands of products and repeatedly found examples of loyalty price offers that are not as good as they seem. We also raised concerns that millions of consumers are being locked out of access to lower prices due to loyalty program restrictions.

“It is therefore vital that supermarkets act on the CMA’s recommendation and do more to enable people to join their schemes.

“The CMA must continue to monitor loyalty pricing practices in key consumer sectors, outside supermarkets, and be prepared to use its new powers to take action against retailers who fail to comply with consumer law.”