The Competition and Markets Authority (CMA) has given an update on the controversy surrounding supermarket loyalty prices.
Major players such as Sainsbury’s and Tesco had previously been accused of artificially inflated non member prices to make their loyalty price appear more attractive.
The CMA found that while UK supermarkets are not likely to be misleading shoppers over loyalty pricing, there are still “questions” over whether displayed savings are genuine.
The watchdog said it was in the process of analysing thousands of loyalty price promotions among grocers.
This include popular supermarket promotion schemes such at Tesco, Sainsbury’s, Morrisons and Lidl.
The issue at hand was whether non-member, or regular, prices may have been artificially inflated by supermarkets to make their loyalty price appear more attractive.
CMA finds competition between supermarkets remains ‘effective’
PA
Whilst still conducting their investigation, the CMA said: “The results to date suggest we are unlikely to identify widespread evidence of loyalty promotions that mislead shoppers in this way”.
It suggests major supermarkets could avoid the wrath of the regulator when it publishes a full report of its findings in November.
Nevertheless, the CMA said it was looking deeper into the issue of retailers alternating between loyalty prices and “was” and “now” discounts.
The practice raises questions as to what the regular price is for a product and therefore whether shoppers are genuinely making the savings advertised to them, the regulator said.
It is also examining whether shoppers trust that savings are genuine, and how much people shop around and compare prices.
Helen Dickinson, Chief Executive of the British Retail Consortium, said: “We welcome the CMA update, which once again shows that supermarkets are doing their best to provide great value groceries for their customers.
With food inflation now returned to normal levels, fierce competition between retailers is ensuring customers are the big winners from the UK’s supermarket sector.
“The CMA’s update shows that they have not found widespread evidence of misleading loyalty promotions.
“Whether it’s everyday value, or loyalty schemes discounts, retailers know they have to demonstrate clear value to attract and retain customers.”
There has been a sharp decline in food inflation, which has fallen significantly to just 1.5 per cent in June 2024, below the level of headline inflation.
While operating profits have recovered slightly from the historically low levels seen in 2022/23, they remain in line, or below levels seen before the cost of living crisis.
The CMA recognises the ‘effective competition’ between retailers is keeping prices as low as possible for customers and ensuring that where retailers can make cost savings, these are passed on to customers.
This competition is one of the key reasons why the UK continues to deliver some of the cheapest groceries in Europe.