Yahoo Finance Which? reports Tesco to CMA over pricing of Clubcard offers
The consumer group Which? has reported Tesco to the UK’s competition watchdog over the supermarket’s failure to provide detailed pricing information on its loyalty card offers.
The group said the UK’s largest retailer had not clearly explained the unit price of deals for its Clubcard holders – such as the price per 100g or 100ml – so that shoppers could easily compare value for money between different sized packages, bottles, brands and retailers.
It said the lack of unit pricing could be a “misleading practice” under consumer protection regulations because it could make it difficult for shoppers to determine which was the cheapest product.
In one example, Which? found a 700g bottle of Heinz tomato ketchup in Tesco for which the label showed the standard price to be £3.90, or 55.7p per 100g. A prominent Clubcard label showed the same size bottle on offer at £3.50, but the unit price, which would be 50p per 100g, was not given.
At the same time a 910g bottle of the same ketchup on the shelf below was priced at £3.99, or 43.8p per 100g, for all shoppers, making it the cheapest option per 100g. Which? argued many shoppers would wrongly assume the Clubcard option was the best deal available.
With double-digit food price inflation since last winter, supermarkets have come under scrutiny for practices such as stocking fewer of their cheaper ranges in small stores and high mark-ups on goods for home delivery.
Sue Davies, the head of food policy at Which?, said: “Tesco’s unclear Clubcard pricing is at best confusing for shoppers struggling with soaring food inflation and at worst could be breaking the law.
“This is simply not good enough from the UK’s biggest supermarket. Tesco should think of its customers and act now to introduce clear unit pricing on all offers, including Clubcard promotions, so shoppers can easily find the best value items.
“We expect the regulator to look at unit pricing on the growing number of supermarket member price schemes as part of its review.
“At this time of crisis, supermarkets cannot cut corners. They have a duty to ensure pricing is clear so that customers can get the best value.”
A spokesperson for Tesco said the company had sought advice and approval from its local trading standards office in Hertfordshire, where the £19bn company has its headquarters, for its approach to Clubcard pricing.
“Providing great value and clear pricing is really important to us,” they said.“We are supportive of calls for greater clarity on the regulations in this area … However, given that we are complying with all the current rules, we are disappointed that Which? has chosen to make these ill-founded claims against our Clubcard Prices scheme, which helps millions of households get great value week-in, week-out.”
The Competition and Markets Authority (CMA) announced in January that it would investigate the issue of unit pricing because it said it was important that shoppers were able to compare like with like, particularly during the cost of living crisis.
The watchdog said it would examine retailers’ compliance with the law, consumer awareness and the use of unit price information, revisiting a similar investigation in 2015 when it recommended the government consider reviewing and clarifying the legal requirements on pricing.
Asked for a response to the Which? complaint about Tesco, the CMA said it expected to publish its latest review, including recommendations for the government, in late July.
It announced in May that it would look at whether a poorly functioning market was contributing to food price inflation, alongside a similar investigation into fuel prices.
The chancellor, Jeremy Hunt, said last month that the government stood ready to update pricing rules and guidance after the CMA’s review.
