Supermarkets hike prices to make loyalty card customers feel like they are getting a discount, new study claims
Supermarkets such as Tesco and Sainsbury’s could be hiking their ‘regular’ prices to make loyalty scheme customers feel they are getting a discount, according to a new report by Which.
The consumer choice group analysed 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s and tracked their pricing history back six months.
According to Which’s investigation, Sainsbury’s advertised a jar of Nescafe Gold Blend Instant Coffee (200g) for £6 with a Nectar card – a saving of £2.10 on the regular price of £8.10.
But Which said 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.
In a separate investigation at Tesco, Which found Heinz Salad Cream (605g) with a Clubcard price of £3.50 and a regular price of £3.90 – however its regular price had been £2.99 for several weeks before it was increased to £3.90.
‘Big Four’ grocery stores have had increasing pressure placed on them amid the cost of living crisis to keep prices as low as possible for consumers, with all major supermarkets having introduced price cuts on products.
Earlier this year, supermarket bosses were also called to answer questions in parliament about whether or not they had exploited inflation by raising grocery prices.
Sue Davies, Which head of food policy, said:“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.
The company has not made an official complaint to the Competition and Markets Authority (CMA) but has shared the findings of the research with the authority.
A spokesperson for the CMA told City A.M: “Grocery prices are a huge concern to people all over the country and shoppers need help to spot the best value for their money. That’s why the CMA has a programme of work in the groceries sector such as looking into unit pricing practices online and instore.”
“We will consider the information provided by Which about its recent investigation into loyalty prices.”
A Tesco spokesperson said: “We know that having low prices on the products we sell is really important to our customers right now, which is why we have more than 8,000 weekly deals on Clubcard Prices, offering customers potential savings of up to £351 a year – all while collecting Clubcard points that can be put towards groceries and fuel, or doubled in value with our Reward Partners.
“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.”
“As Which? reported recently, Tesco was the cheapest of all the major supermarkets when a Clubcard was used – and was extremely competitive when compared with the limited range discounters.”
A Sainsbury’s spokesperson 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 Nescafe 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.“