A CMA probe into supermarket loyalty pricing concluded today by revealing more than 90% of the prices offered are genuine, despite over half of consumers mistakenly believing they are misleading.
The findings, which come after long-running campaigns by the likes of Which? against what it regularly claims are exaggerated deals by major food retailers, analysed 50,000 grocery products on loyalty price promotion.
The CMA said it had found “very little” evidence of supermarkets lifting their “usual” prices as displayed on the offers to make the deals seem more attractive, despite its research showing 55% of the public believe they are manipulated.
The authority also concluded that shoppers who were part of supermarket loyalty schemes could “almost always” make genuine savings on the usual price by buying loyalty-priced products.
The CMA found the overwhelming majority (92%) of around 50,000 products on a loyalty dual price promotion offered genuine savings on the usual price of the product at that retailer.
Whilst loyalty prices were generally some of the cheapest available, it wasn’t always the case, and it found shoppers could sometimes find cheaper offers by “shopping around”.
Some 61 of the 429 products with a loyalty price it examined were available at a lower price at other supermarkets.
But it said there was “very limited evidence” of price changes which could indicate that supermarkets may have inflated prices to make their loyalty prices appear misleadingly attractive.
“Our findings should provide reassurance to shoppers: in the majority of cases, those without a loyalty scheme membership are paying the same price during a loyalty promotion as they do in the weeks both before and after it,” it said.
“Our analysis shows loyalty prices are generally the same price or cheaper than the cheapest price available for that product at other supermarkets.”
As part of its probe, the CMA conducted a consumer survey to understand what shoppers thought about loyalty pricing, including whether they trusted the schemes and if they thought they were fair – as well as scrutinising the supermarkets’ behaviour including their use of customer data.
The CMA found shoppers could make an average saving of 17%-25% buying loyalty-priced products at the five supermarkets examined: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons.
Meanwhile, 76% of shoppers said loyalty pricing has not changed where they shop, but 24% now compare prices more due to the introduction of loyalty pricing.
Yet 55% of those surveyed said they thought the price for non-members is inflated during loyalty price promotions.
Campaign group Which? has been leading a major campaign to expose what it claims are “murky” deals among retailers. In August it accused loyalty cards, including Tesco Clubcard, of “ripping off” customers and slammed the two-tier pricing on offer for members and non-members of loyalty card systems.
“We looked at the pricing history of thousands of products and found that, while the majority of discounts were not misleading, there were some questionable non-member prices and some examples that looked like an outright rip-off,” said Which? retailer editor Ele Clark at the time.
Today’s report by the CMA follows its initial findings released in July, which suggested there was “no widespread evidence” of supermarket loyalty schemes misleading customers.
To test whether prices and savings were genuine, the CMA analysed the loyalty prices of the five supermarkets offering loyalty price promotions at the start of its review: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons (Lidl has started to offer loyalty pricing more recently).
The promotions analysed covered August and November in 2023, to check whether the savings were genuine by looking at the price charged in the weeks before, during and after the loyalty price promotion.
The CMA looked at 429 branded products on a loyalty promotion at one, or more, of Tesco, Sainsbury’s, Morrisons and Co-op. It then collected price data for up to six other supermarkets – Asda, Co-op, Morrisons, Ocado, Sainsburys, Tesco and Waitrose – if they also sold the identical branded products, to compare the prices.
Discounters Aldi and Lidl were not included in this analysis as neither supermarket sells online or “offers a wide enough range of branded products to enable a like-for-like price comparison”.
The CMA found 43% of those it surveyed felt it was unfair that loyalty scheme members paid lower prices for some products than those without a membership, although it found that the concerns about how their personal data was used was not stopping them from joining a loyalty scheme.
Only 7% of those surveyed said they had declined to sign up to a scheme due to personal data concerns, whilst 97% of shoppers were a member of at least one supermarket loyalty scheme, and on average shoppers are members of three supermarket loyalty schemes.
It found some supermarkets could do more to make sure certain shoppers – such as those without smartphones and the elderly – were able to join and make use of loyalty schemes.
But it found no evidence of supermarkets breaking the law over how they collect data.
“We know many people don’t trust loyalty card prices, which is why we did a deep dive to get to the bottom of whether supermarkets were treating shoppers fairly,” said George Lusty, interim executive director of consumer protection at the CMA.
“After analysing tens of thousands of products, we found almost all the loyalty prices reviewed offered genuine savings against the usual price – a fact we hope reassures shoppers throughout the UK.
“While these discounts are legitimate, our review has shown loyalty prices aren’t always the cheapest option, so shopping around is still key. By checking a few shops, you can continue to stretch your hard-earned cash.”
In September, the BBC Panorama programme ran an investigation which slammed supermarket loyalty card activities, including accusations from Which? that the likes of Tesco were using “psychological tricks” to con shoppers, and try to prevent them from taking advantage of cheaper and often higher-quality products at the discounters.
A Tesco spokeswoman said today: “Clubcard Prices has always been about offering genuine savings and rewards to our customers, and we are pleased this has been evidenced by the CMA.
“We are always working to find the best possible deals for our customers, and with around 8,000 products included in Clubcard Prices every week, we’re helping customers save up to £385 a year off their groceries.”
Shore Capital analyst Clive Black, who has been highly critical of the CMA’s probe and of claims by the likes of Which?, described today’s report as a “rare bout of common sense”.
He added: “The CMA update does not come as a surprise, shoppers can be fooled some of the time, but rarely all of the time, and the broad popularity of UK grocery loyalty schemes is a testimony to that.
“The findings are very good news for Tesco and Sainsbury’s in particular, given their proprietary capabilities in this arena. Less good for Aldi and B&M, the latter who has characterised Clubcard Prices as a gimmick whilst underperforming the market.
“So, it will be a considerable relief to those retailers with loyalty schemes that material potential interference and all that comes with that is being avoided by the CMA.”
It is not the first time claims by the likes of Which? have been shot down by the CMA. In 2015 a response to a so-called “super-complaint” lodged by the consumer body cleared supermarkets of misleading the public, despite Which? claiming to have consistently identified a range of misleading and confusing pricing tactics in supermarkets, including dodgy multibuys, shrinking products and baffling sales offers. It had warned shoppers could be collectively losing out to the tune of hundreds of millions of pounds.
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