the consumer group Which? used its legal powers under the Enterprise Act 2002, to file a complaint with the Competition and Markets Authority (CMA), regarding what it believes to be "confusing," "dodgy" and "misleading" supermarket pricing tactics, that could potentially harm consumer interests.
The 24-page dossier took seven years to compile and is currently with the CMA, which has 90 days to respond. In light of the allegations, I believe that the supermarkets accused are well within their rights to fight their corner.
When it comes to food retail the UK is one of the most competitive markets, and is able to afford consumers some of the lowest prices on goods across the whole of the EU. As a nation the UK has always been very accepting of competitive pricing and promotional offers.
Having a high-base price, which is easy to discount, is a fairly commonplace practice. Consumers enjoy seeing stickers on products saying 30% off, even when they know it is simply reduced to a reasonable price – they accept it as part of the retail experience.
Another key factor driving this debate is the growth of discounted supermarket chains. Retailers like Aldi and Lidl tend to have everyday lower prices rather than promotional offers. The result of this is intensifying the pressure on supermarket chains like Sainsbury’s and Tesco, which recently – a key reason for this the retailer admitted, was failing to keep up with the growing pace of discounted retailers.
The quality of the produce, as well as continually low prices keeps consumers visiting discount retailers. As a result, the big four supermarkets (Tesco, Asda, Sainsbury's and Morrisons) are struggling to cope as consumers vote with their feet and wallets, and that’s why we are seeing this heavy reliance on promotional pricing.
Supermarkets are perfectly entitled to do this and unless there are any serious breaches when it comes to advertised promotional prices, we are unlikely to see legislation change anytime soon.
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