Calls for investigation as supermarkets accused of using price trick on loyalty offers

Consumer group analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s, tracking them back six months

Loyalty offers at Tesco and Sainsbury’s are “not all they’re cracked up to be”, watchdog Which? has warned.

The findings are part of an investigation into the increasingly widespread use of loyalty card schemes across supermarkets, which only allow those customers who are signed up access to the lower tier of pricing.

Researchers analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s, tracking them back six months to find that around a third (29 per cent) of the member-only promotions were at their so-called “regular” price for less than 50 per cent of the six-month period.

Salad Cream was cheaper before Tesco ‘reduced’ the condiment to Clubcard price

For example, Which? found Heinz Salad Cream (605g) at Tesco with a Clubcard price of £3.50 and a regular price of £3.90, even though its regular price had been £2.99 for several weeks before it was increased to £3.90 – just 22 days before the Clubcard promotion.

The condiment had been at its regular price for just 25 days out of 183, or 14 per cent of the previous six months.

Both Sainsbury’s and Tesco said Which? had failed to take inflation into account when analysing prices, and stressed that they adhered to Trading Standards rules on promotions.

Which? identified three recurring problems around the “regular” price quoted for products on offer to customers with loyalty cards – that they were far more expensive than at other supermarkets, that they had been changed right before the promotion, or were only available for a short amount of time.

Among the deals of concern was a jar of Nescafé Gold Blend Instant Coffee (200g) advertised at Sainsbury’s for £6 with a Nectar card – a saving of £2.10 on the “regular” price of £8.10.

However, the regular price had also been £6 at Sainsbury’s until it went up to £8.10 just two days before the Nectar price launched.

Which? also found the regular Sainsbury’s price was significantly higher than at other supermarkets, such as Asda, where the same jar cost £7, or at Morrisons, Ocado and Waitrose where it was available for £6. It was even cheaper at Tesco (£5.99) and at Lidl (£5.49).

Overall, Which? found a third of the products at Sainsbury’s (34 per cent of 71 products) were the “regular” price less than half the time over the previous six months. At Tesco, the same was true for 24 per cent of the 70 items analysed.

As well as being clear and not making unfair price comparisons, current regulator guidance dictates it is important that if a proposed pricing practice explicitly or by implication indicates a saving against another price, the quoted saving is genuine and can be trusted by shoppers.

Which? said it had shared its findings with the Competition and Markets Authority (CMA) and asked them to look at whether supermarkets could be hiking their “regular” prices to make loyalty scheme customers feel they are getting a discount.

Tesco claim their Clubcard promotions follow strict guidelines (PA Wire)

A Sainsbury’s spokeswoman said: “Nectar prices offer our customers the opportunity to make genuine savings across 5,000 products. Which? fails to recognise that base prices have been increasing throughout the year due to inflation. Our promotional rules around Nectar prices are informed by the guidance from Trading Standards.

“The Nescafé Gold example demonstrates Which?’s flawed methodology as the claim that the ‘regular’ price was £6 is untrue. The base price of this item has been £8.10 since December 2022 and £6 was a promotional price throughout this year, including on Nectar prices when it launched in April.”

A Tesco spokesman said: “All our Clubcard price promotions follow strict rules, including considering how they compare against prices in the market, to ensure they represent genuine value and savings for our Clubcard members.

“These rules have been endorsed by our Trading Standards Primary Authority.”

Which? also raised concerns that not all customers were able to sign up to the loyalty schemes in the first place, with age and address-based restrictions as well as digital requirements leaving groups such as young parents and carers, schoolchildren buying lunch and those in temporary accommodation potentially excluded from benefiting from lower prices – and possibly paying inflated normal prices.

A survey of 2,000 UK adults for Which? found that 20 per cent of those who had noticed member-only pricing said it had led them to shop at their supermarket more frequently than before.

Some 69 per cent said they were willing to exchange their personal data for discounted prices.

Sue Davies, Which? head of food policy, said: “It’s not surprising that shoppers are questioning whether supermarket loyalty card prices are really a good deal, as our investigation shows that up to a third of loyalty offers at Tesco and Sainsbury’s are not all they’re cracked up to be.

“As member-only pricing continues to grow, the sector, its pricing practices and who is eligible for membership needs to be properly scrutinised so that all shoppers – including society’s most vulnerable – can benefit and no one is misled into buying things they wouldn’t have usually bought or which isn’t quite the deal they believe it to be.

“Which? is calling on supermarkets to make sure that their loyalty card prices don’t mislead and for the regulator to look more closely at this growing trend towards dual pricing. There is also the important issue of whether it is right for certain groups to be excluded from member-only schemes.”