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Supermarkets sign up to new code on price promotions

Eight supermarkets have agreed to sign up to a new set of trading principles which address concerns over special offers and promotions for food and drink following concerns that shoppers could be confused by the way in which prices are displayed, advertised and promoted.

GENERAL MERCHANDISE

Supermarkets sign up to new code on price promotions

Aldi, Co-Op, Lidl, Marks and Spencer, Morrisons, Sainsbury's, Tesco and Waitrose have all agreed to adopt a voluntary code set out by the Office of Fair Trading which clarifies the body’s view on how promotional claims should be used. However Asda, which is the UK’s second biggest supermarket, has refused to sign up to the code although it said its decision not be included was not a "closed door". 

The code covers claims such as 'Was £3, Now £2' or 'Half Price'. It states that prices should be presented as discounts for the same or less time than the product was initially sold at the higher price, and that prices should not be artificially inflated to make a later 'discount' look more attractive.

In addition, the code says that pre-printed value claims on packs, such as 'Bigger Pack, Better Value', must be true. Where such claims are made, there should not be a cheaper way of buying the same volume of the product elsewhere in the same store. This applies even when there is a promotion on smaller packs of the same item.

The OFT said that supermarkets had not broken the law or engaged in misleading promotional practices. However it identified "what appeared to be inconsistency in the way the law was being interpreted and applied" and as a result had developed the new principles to establish "a more consistent approach across the sector".

Clive Maxwell, OFT chief executive, said: "Household budgets across the country are under pressure and shoppers should be able to trust that special offers and promotions really are bargains. Prices and promotions need to be fair and meaningful so shoppers can make the right decisions. Nowhere is this more important than during regular shopping for groceries, which accounts for 44% of household spending.

"Our principles taken together with previous guidance provide supermarkets with a clear benchmark for how they should be operating so that their food and drink promotions reflect the spirit as well as the letter of the law. We are pleased that supermarkets have engaged constructively throughout our investigation and we will keep a watching brief on promotional practices in this sector."


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