Supermarket price cuts slammed as misleading
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Tesco and Asda have been slammed for misleading consumers by manipulating price cuts in the run up to Christmas, according to a report.
An investigation by The Guardian found that the majority of price cuts introduced by the supermarket in the run up to Christmas were worth just 1p, while at the same time the stores increased prices on other products by much more.
John Bridgeman, former director general of the Office of Fair Trading, says that the analysis of supermarkets pricing policy shows a “cynical manipulation of the language of value”.
Bridgeman has criticised Asda and Tesco’s use of price cuts in marketing as misleading to consumers and the 1p price cuts promoted by the supermarkets in festive advertising damaged the credibility of their marketing slogans.
“They are not in reality cutting prices but flexing prices, making them go up and down and destabilising the price structure,” Bridgeman told The Guardian. “All they are doing is introducing so much volatility no one can tell whether prices are going up or down. It can only be to consumers’ detriment and it does their image no good,” he adds.
The report sates that two thirds of Asda’s 800 price cuts in the week before Christmas were worth just 1p while 53% of the 850 price rises in the same period were more that 10p.
In the same period, Tesco cut 930 prices, with 70% down by just 1% compared to 1,000 price increases, of which 70% were more than 10p.
In a statement, Tesco says it does not recognise the data The Guardian is using, adding “we do not manipulate prices in this cynical way.”
Readers' comments (3)
Sanjeev Sachdeva | Mon, 22 Feb 2010 11:59 am
How can there be real 'competition' when all the supermarkets are making billions of pounds? Real competition would lead to lower prices and lower profits!
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John Gilburn | Mon, 22 Feb 2010 12:41 pm
I fully agree with these findings. I had gone to my local Tesco supermarket, only to find the price of drink in particular, showing "price cuts", whereas the prices had actually increased by as much as £1 in respect of a bottle of whisky from the previous week.
This same practice applies throughout the stores. You will inevitably see products at a particular price in one week, and then, the following week, the price has risen by as much as 10%, followed the next week by headlines of "price cuts" which usually amount to 1p off, leaving the prices much higher than the original price.
It is a fraudulent way of increasing prices but giving the impression that the supermarkets are actually cutting them.
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Danielle Pinnington, Managing Director, Shoppercen | Wed, 24 Feb 2010 10:32 am
Our research report of Trust last year suggested shopper trust was already being challenged by retailer behaviour. This kind of report isn’t going to make shoppers feel any more secure about retailers promises.
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