Loyalty pricing in the groceries sector
The CMA has begun a review of loyalty pricing by supermarkets.
Administrative timetable
| Date | Action |
|---|---|
| 26 July 2024 | Update published |
| 30 January 2024 | Review opened |
Update on our review – July 2024
26 July 2024: Since January 2024 the CMA has been undertaking a wide-ranging review into loyalty pricing in the groceries sector. A key focus to date has been on whether any aspect of loyalty pricing offered by some grocery retailers could mislead shoppers. It is vital that people can have confidence that advertised savings are genuine and are able to make properly informed choices when shopping, particularly in the context of continued cost-of-living pressures.
We have considered whether there are pricing practices that indicate that the non-loyalty (or non-member) price may have been artificially inflated to make the loyalty price appear misleadingly attractive. To do this we have gathered information from grocery retailers that offer loyalty pricing, and we are analysing, for example, what happens to prices before, during, and after a product goes onto a loyalty price promotion.
Our analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest we are unlikely to identify widespread evidence of loyalty promotions that mislead shoppers in this way.
In our analysis we have seen examples of retailers alternating between ‘was/now’ promotions available to all shoppers and loyalty price promotions. This raises questions as to what the ‘regular’ price is for the product and therefore whether the claim saving for the ‘was /now’ promotion is genuine. We are looking further into this issue.
We are also comparing a sample of supermarkets’ loyalty prices to those prices charged by other supermarkets at the same time. Particularly given concerns raised by stakeholders, it is valuable for shoppers to have insight into how loyalty prices can compare with prices available elsewhere, including when they are on promotion at other retailers.
We have commissioned a consumer survey to understand the impact of loyalty pricing on how we shop, including how much people shop around and compare prices.
This survey is also exploring issues such as whether:
- loyalty pricing is affecting shoppers’ engagement with supermarket loyalty schemes
- shoppers’ trust that the price savings for members are genuine
- shoppers have concerns about supermarkets’ use of their personal data
- attitudes to loyalty pricing vary between different types of shoppers and if so how.
We will publish a report of our findings in November 2024. The report will also set out the CMA’s views on how retailers can stay on the right side of consumer law when offering loyalty price promotions, and when offering was/now promotions in close proximity to a loyalty price promotion.
Find out more about what we are doing to help people get a fair deal as they face the rising cost of living.
This update covers our recent work on road fuel prices, groceries, infant formula, vet services, online shopping and housing.
Summary
With the rise in some supermarkets making cheaper prices only available for loyalty card members, the CMA announced that it would begin a review of loyalty pricing by supermarkets in January 2024.
In line with that announcement, our review of loyalty pricing started this month. The review is part of a programme of work by the CMA to help tackle cost of living pressures in the groceries sector.
The review will consider issues such as whether:
- any aspects of loyalty pricing could mislead shoppers, for example whether the loyalty price is a genuine promotion or as good a deal as presented
- any groups of shoppers are disadvantaged by this type of promotional activity
- loyalty pricing is impacting consumer behaviour, and whether this has an impact on how supermarkets compete with each other
The review is at an early stage and we have not formed any views on the issues. We are now beginning our engagement with supermarkets. We will publish an update on our work in July 2024, and expect to complete our review by the end of the year.
Contact
- Senior Responsible Officer, Hayley Fletcher, hayley.fletcher@cma.gov.uk
- Project Director, Louise Strong, louise.strong@cma.gov.uk
- Assistant Project Director, Debbie Kitcher-Jones, debbie.kitcher-jones@cma.gov.uk
- Email groceriespricing@cma.gov.uk
Any media enquiries should be directed to a member of our Press Office: press@cma.gov.uk
Updates to this page
Last updated 26 July 2024 + show all updates
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July 2024 update published
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First published.