Supermarket loyalty pricing offers ‘genuine savings’, says watchdog

Loyalty pricing at UK supermarkets does offer “genuine savings” but customers should still shop around as it is not always the cheapest option, the competition watchdog has found.

The Competition and Markets Authority (CMA) said that after analysing 50,000 loyalty-priced products, it found 92% offered savings on the usual price.

And customers can make savings of up to 25% by buying loyalty priced products, according to the regulator.

But it stressed that while they offer “legitimate” discounts, supermarket customers could still find cheaper alternative options by shopping around.

The CMA added that there was also “room for improvement” over people’s ability to access loyalty schemes and that supermarkets could do more to help people without access to smart phones, and under 18s, to access these prices.

This could include introducing offline sign-up, in-store or via the telephone for example, and lowering the minimum age for joining a scheme, according to the CMA.

“Deep dive”

George Lusty, interim executive director of consumer protection, said: “We know many people don’t trust loyalty card prices, which is why we did a deep dive to get to the bottom of whether supermarkets were treating shoppers fairly.

“After analysing tens of thousands of products, we found that almost all the loyalty prices reviewed offered genuine savings against the usual price – a fact we hope reassures shoppers throughout the UK.

“While these discounts are legitimate, our review has shown that loyalty prices aren’t always the cheapest option, so shopping around is still key.”

Loyalty price promotions form part of loyalty schemes, whereby customers can sign up to access lower prices, personalised rewards and offers, and loyalty points.

The CMA analysed the loyalty pricing of Tesco, Sainsbury’s, Morrisons, Waitrose and Co-op.

The CMA was looking into whether non-member, or regular, prices may have been artificially inflated by supermarkets to make their loyalty price appear more attractive.

It found that shoppers can make an average saving of 17% to 25% by buying loyalty priced products across the five chains in the review.

But many shoppers do not trust the discounts on offer, with more than half (55%) of people thinking usual prices are upped to make loyalty deals more appealing, the CMA said.

Over three quarters (76%) of people said loyalty pricing had not changed where they shop but almost a quarter (24%) compare prices more due to the introduction of loyalty pricing.

Access

There are also worries among shoppers over access to loyalty pricing, with 43% of those surveyed saying they believe it is unfair that members of these schemes pay lower prices for some products than those without membership.

As part of the wide-ranging review, the CMA also looked at the way supermarkets collect and use people’s data when they sign up to loyalty schemes.

It said it did not find any evidence of consumer law being broken in relation to this.

Sue Davies, head of food policy at consumer group Which?, said while the findings were “reassuring”, it still had concerns over the practice of loyalty pricing.

She said: “Which? has also looked at prices for thousands of products and repeatedly found examples of loyalty price offers that aren’t as good as they seem.

“We have also raised concerns that millions of consumers are being excluded from accessing lower prices due to loyalty scheme restrictions.

“It’s therefore essential that supermarkets act on the CMA’s recommendation and do more to enable people to join their schemes.”