Supermarkets agree new code to clean up 'discount' cons

Updated on 30 November 2012 | 7 Comments

Eight supermarkets have agreed to a code, set out by the OFT, to ensure special offers and price promotions are always fair.

Aldi, Co-op, Lidl, Marks and Spencer, Morrisons, Sainsbury's, Tesco and Waitrose have all agreed to adopt a new set of principles set out by the Office of Fair Trading (OFT) that will make sure promotions and special offers are fairly advertised to shoppers.

The code has been organised as a result of an investigation launched by the OFT into supermarkets and the way they advertised discounts. This involved mystery shopping exercises as well as talking to shoppers and the supermarkets.

The investigation didn’t reveal any law breaking or misleading promotional practices. But there was inconsistency in the way the law was being interpreted and applied on offers related to food and drink.

Many of the issues that have been looked into have been deplored for a while now. In May consumer champion Which? exposed the practices of some supermarkets with research conducted over a year tracking promotions that are meant to be bargains but were in most cases rip offs. Read: Which?: The four ways supermarkets con shoppers for more.

Only Asda has yet to sign up to the code.

Principles agreed

The OFT has set out principles covering four areas:

1. Supermarkets should never artificially manipulate prices so that future discounts look more attractive. Instead retailers will now have to reduce the price of a product below its genuine selling price and offer shoppers a real saving during a clearance or promotion.

2. Supermarkets should not refer to a product as being discounted if it has been at this price for longer than it has been at a higher price. Instead the discounted price should be considered the normal price - as the length of time means it’s no longer appropriate to describe the price as a discount. It is to be measured using a 1:1 ratio, so if something was £10 for a month and is reduced to £5 it will need to revert back after one month to fulfil the criteria.

3. Supermarkets should not reference previous selling prices unless they give meaningful information for comparison. So instead of retailers using prices that the product sold for many months ago, they should only refer to the price a product was in the last two months to give a genuine indication of the value of the products.

4. Lastly, supermarkets will be required to stop using misleading best/better value stickers if there is a cheaper way of buying the same volume of identical products in the same store. This applies to buy-one-get-one-free and other multi-buy offers. Retailers must ensure the unit price of the better value offer is lower than the unit price of smaller packs.

Protecting shoppers

The new principles set out in the code should ensure shoppers are being treated fairly and are not being misled.

Clive Maxwell, OFT Chief Executive, said shoppers should be able to trust that special offers and promotions are really bargains. The code will hopefully mean prices and promotions are fair and meaningful so shoppers can make the right decisions.

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