An investigation by consumer organisation Which? has found that supermarket chains Tesco and Sainsbury’s may be misleading customers into thinking they are getting better value for money when using loyalty offers than they actually are.
The investigation also found that some customers are being denied access to member discounts altogether.
Which? analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s – the UK’s two biggest supermarkets, with a combined share of 42% of the UK grocery market – and tracked their pricing history over a period of six months.
In one example, Which? found that Sainsbury’s had advertised a jar of Nescafé Gold Blend Instant Coffee (200g) for £6 with a Nectar card – a saving of £2.10 on the ‘regular’ price of £8.10. But the regular price had also been £6 until it went up to £8.10 just two days before the Nectar price launched.
Similarly, Which? found Tesco selling 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 (14% of the previous six months).
Which? has shared its findings with the Competition and Markets Authority (CMA) and asked the regulator to examine whether supermarkets could be hiking their ‘regular’ prices to make loyalty scheme customers believe they are getting a discount.
Which?’s research identified three key problems which centred around the ‘regular’ price quoted for products on offer to customers with loyalty cards: regular prices that had been changed right before the loyalty card promotion; regular prices that were far more expensive than at other supermarkets; and regular prices that were only available for a very short amount of time.
Which? also discovered that not all customers are able to sign up to loyalty schemes, which often have age and address-based restrictions as well as digital requirements. This means 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 that would previously have been available to everyone – potentially meaning particularly vulnerable consumers lose out.
Sue Davies, Which? Head of Food Policy, said: “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 need 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.”