Tesco exaggerated size of price cuts

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By Martin HickmanConsumer Affairs Correspondent

Tesco exaggerated the cheapness of its products in the battle for budget shoppers, the advertising watchdog has ruled.

The Advertising Standards Authority said Britain's largest supermarket suggested it was up to 53 per cent cheaper than Asda and Morrisons for a basket of common items.

But, the ASA ruled, the ads gave a misleading impression because Tesco's "cheap" products were on a promotion for a limited time and the biggest savings came from less common items such as branded dishwasher tablets and dog food.

During the credit crunch, the big supermarkets have resorted to "hit and run" promotions which slash the price of staple goods such as milk for a limited period, attracting newspaper headlines and allowing them to promote themselves as cheaper than their rivals.

Food prices are far higher than they were before the supermarket "phoney price war". Annual food inflation is running at 12 per cent, according to the Office for National Statistics, but an independent check of 17 products last month suggested that Tesco, Asda and Sainsbury's have raised the price of many products by between 22 and 32 per cent over the past 13 months.

In a weekly check of 33 grocery staples, Asda has consistently been the cheapest of all the big four supermarkets, according to the Grocer magazine.

In an attempt to stake its price-cutting claims, Tesco compared a basket of common shopping items such as cheese, coffee, mince and several cleaning products with its nearest rivals for budget shopping in two press ads. One ad stated "Asda £76.15, Tesco £49.50. Why pay more at Asda?" The other stated: "Morrisons £75.11, Tesco £49.58. Save a trolley-load of cash at Tesco."

In its investigation, the ASA acknowledged that Tesco had not intended to give the impression of general savings and agreed that several of the items, such as milk, eggs, meat and fruit and vegetables were routinely bought by customers.

But it added: "We also noted, however, that the comparisons included a number of domestic household products and other goods which, we considered, were not representative of a consumer's typical shopping basket."

Martin Hickman's consumer blog: independent.co.uk/spendingpower