- Competition watchdog has ruled that loyalty programs do not inflate costs
British supermarket prices offered through loyalty programs provide real savings, the competition watchdog has claimed.
The Competition and Markets Authority has reviewed supermarket loyalty pricing over fears these schemes may have been ripping off shoppers.
Loyalty price discounts are considered by many to be the “true” cost of food, and the undiscounted price is a steep markup for people who aren’t enrolled.
The vast majority of UK shoppers now use these schemes, which cover an increasing number of products.
Loyalty programs such as market leader Tesco’s Clubcard and Sainsbury’s Nectar offer significantly lower prices for members and have proven to be a huge success for the UK’s largest supermarkets.
And today the CMA said it had analyzed around 50,000 grocery products on promotion and found very little evidence that supermarkets inflated their “usual” prices to make loyalty promotions look like a better deal.
Crisis at the checkout: The growth of loyalty schemes in supermarkets has been criticized by shoppers and consumer advocates, who suspected that the discounted prices were actually the real ones.
The CMA found that shoppers can make an average saving of 17 to 25 per cent by purchasing loyalty-priced products at the five supermarkets examined: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons.
“We know that many people don’t trust loyalty card prices, so we did a deep dive to get to the bottom of whether supermarkets were treating shoppers fairly,” said George Lusty, interim chief protection officer. to the CMA consumer.
“We found that almost all loyalty prices analyzed offered real savings on the usual price, a fact we hope will reassure shoppers across the UK.”
However, Lusty noted that the CMA review had shown that loyalty pricing was not always the cheapest option and advised customers to shop around.
An investigation by consumer advocate Which? has discovered that a large number of customers cannot access those cheaper prices because they cannot sign up for loyalty programs.
Millions of buyers are unable to register due to criteria often beyond their control: minimum age requirements, having a UK residence or address and needing an email address or app.
Researchers found that customers must be over 18 to join schemes run by Lidl, Sainsbury’s, Tesco and Waitrose, but only need to be 16 at Co-op and Morrisons.
Shoppers under 16 can sign up for a junior membership at the Co-op or Sainsbury’s or be added to a parent or guardian’s account to access the cheapest price tier.
In July, the CMA said it did not expect to find widespread evidence of promotions misleading consumers.
