Save, make, understand money

Household Bills

Tesco reported to competition regulator over Clubcard pricing

Rebecca Goodman
Written By:
Rebecca Goodman

Tesco has been reported to the regulator by the consumer group Which? for confusing pricing which could potentially be illegal.

The group said the supermarket’s “lack of clear pricing” on the majority of its food and drink promotions could mean it is breaking the law.

Which? has raised concerns over unit pricing at Tesco. This helps shoppers to compare prices between supermarkets, for example the cost per 100g or 100ml of an item.

It claims that because Tesco has decided not to display unit pricing with its Clubcard offers, this could be misleading under the Consumer Protection From Unfair Trading Regulations 2008 (CPRs) because it can make it “unnecessarily difficult” for shoppers to work out which items are cheapest.

One example identified by the consumer group found a 700g Heinz tomato ketchup bottle for £3.90 (or 55.7p per 100g). However, a Clubcard label shows that the bottle is on offer for £3.50. There is no equivalent unit pricing shown, which should display 50p per 100g.

On the shelf below a 910g bottle is £3.99, or 43.8p per 100g, which is in fact cheaper. The group said many shoppers may wrongly think the bottle which has been discounted with the Clubcard offer is cheapest, because it doesn’t show the price per unit.

The rules of unit pricing are set out in the Price Marking Order 2004 and retailers must also “avoid unfair commercial practices”.

However, Which? said it believes unit pricing could be seen as “material information” which most people need to make informed decisions about how to find the best value items.

Tesco ‘consistently omitting unit pricing from Clubcard offers’

This is of particular significance, it said, because of soaring food inflation and the fact that many supermarkets have launched loyalty schemes with cheaper prices available to members. Although the group said it had found issues with all supermarkets, it said Tesco stands out as it “consistently omits unit pricing from Clubcard offers”.

Sainsbury’s recently-launched Nectar Prices scheme, for example, which gives shoppers a discount when they show their Nectar card does include unit pricing.

The Competition and Markets Authority (CMA) is currently reviewing grocery unit pricing and is due to publish a report into this at the end of July.

Which? is now calling on Tesco to add unit pricing information to Clubcard offers. By leaving out unit pricing on Clubcard offers, Which? said Tesco is “leaving its customers at risk of spending more on their food shop because they don’t have all the information to make an informed choice”.

It comes as Tesco is due to slash the value of Clubcard points next week making them less valuable when redeemed at the supermarket’s partners.

The supermarket was also ordered by the High Court to change its Clubcard Prices logo in April after claims from Lidl that the supermarket giant copied the budget retailer’s well-known branding.

In 2015, Which? made a super complaint to the CMA over supermarket pricing and, at the time, the CMA said it could be argued that failing to display the unit price could be consider a misleading omission. The group now said the same argument could apply for the pricing being used for the Clubcard offers.

Tesco told Which? its pricing had been approved by Trading Standards but it said it had advised Tesco its labelling was compliant with the Price Marking Order 2004 in December. It did not say if it had considered possible breaches of the CPRs.

‘Supermarkets cannot cut corners’

Sue Davies, Which? head of food policy, 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. We also need to see these retailers support consumers in the face of high inflation by stocking a range of essential budget lines in smaller stores, particularly in areas where people are struggling most.”

‘Ill-founded claims against our Clubcard Prices scheme’

A spokesperson for Tesco said: “Providing great value and clear pricing is really important to us. We always take care to ensure we are compliant which is why we asked Trading Standards to review our approach on Clubcard Prices. They formally endorsed our labelling, confirming it meets the current legal requirements and guidelines.

“We are supportive of calls for greater clarity on the regulations in this area, in the interests of both businesses and consumers, and are actively looking at how we can make the way we display pricing even clearer for our customers. 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, and could save shoppers up to £351 per year.”