An investigation by the BBC’s Panorama has found that bargains offered by the ‘Big Four’ supermarkets are often misleading and, in some cases, could even lead to prosecutions. Together Tesco, Sainsbury’s, Asda and Morrisons control 68% of the UK grocery market and have opened over 200 new commercial properties over the past year. But as they compete to slash prices, the programme asked if truth was the first casualty of the supermarket price war.
“Confusing claims, misleading ads, deals that save you nothing and offers that cost you more.” From the outset Panorama left viewers in no doubt that this was going to be a hard hitting piece of investigative journalism as Sophie Rayworth set out to reveal why 42% of consumers no longer trust the Big Four’s discounts and why 47% claim they feel misled.
“If there was a price war going on at the moment we would have seen profits falling,” said retail analyst Richard Perks. “We would have had severe warnings and that is just not happening.” What’s happening instead, Panorama claims, is a combination of clever marketing and misrepresentative promotions designed to create the illusion of savings and all the ‘Big Four’ are involved.
The programme identified a number of ways this is done. First of all, the illusion can be created by price establishment. This is when a commercial property sells an item at the same price for a period of time and then raises it prior to dropping it to the original price and describes it as a price cut. This is legal providing the higher price has been in place for at least 28 days.
Items included in Tesco’s ‘Big Price Drop’ and Asda’s ‘Wow’ promotion were cited as examples of this practice. Tesco claims it has breached no rules as its promotion was launched at a time of higher costs and Asda has blamed it on an error and removed the goods Panorama highlighted from the offer.
Another confusing practice is the sale of loose fruit and vegetables priced by the kilo alongside packaged items which do not display the weight. The programme found that a pack of five bananas purchased at Sainsbury’s cost £1 while the same amount bought loose cost only 42p. This works out at 99p per kilo more expensive. The supermarkets claim their customers like the choice of buying either loose or packaged fruit and vegetables and that, once again, they have broken no rules.
Other methods a commercial property may use include offering discounted bigger packs when a combination of smaller ones would work out cheaper and claiming a price has been slashed without showing the original price which, in some cases, was cheaper. Morrisons was among those found to be employing both these tactics which the supermarkets blame on mistakes and the manufacturers.
Deborah Parry, a Lawyer and expert in consumer law, disagrees with the defences offered by the supermarkets and suggests they may be in breach of consumer protection legislation. “It’s not just the occasional mishap here. There are repeated examples with many, many products in different locations with different supermarkets and all of them appear to be doing the same thing. So there is the potential for prosecutions to be brought against all of them,” she told Panorama.
All four major supermarkets deny misleading customers and insist that their commercial properties have played a significant role in reducing inflation. This is a view supported by both the Financial Times and the British Retail Consortium (BRC). The Office of Fair Trading has promised to look carefully at Panorama’s findings.
