Calls to investigate supermarkets using 'dodgy' loyalty discounts

Calls are being raised to investigate Supermarket giants Tesco and Sainsbury’s for allegedly using "dodgy tactics" to give loyalty member customers impressions of bigger savings than they are really getting.

According to consumer group Which?, a third (29 per cent) of the member-only promotions for the Tesco’s Clubcard and Sainsbury’s Nectar card were at regular prices just days prior to the promotion.

Both loyalty cards give members a discount off regular prices, but the research suggests that the growing use of promotions attached to the cards raised concerns among shoppers.

Up to a third of loyalty offers at Tesco and Sainsbury’s are “not all they’re cracked up to be”, Which? warned, as it urged the Competition and Markets Authority (CMA) to investigate supermarket dual pricing.

The key findings that Which? identified and shared them with the CMA are regular prices that had been changed right before the loyalty card promotion, regular prices that were far more expensive than at other supermarkets and regular prices that were only available for a very short amount of time.

Among the potentially risky deals, Which?’s investigation revealed Sainsbury’s advertised a jar of Nescafé Gold Blend Instant Coffee (200g) for £6 with a Nectar card – a saving of £2.10 on the ‘regular’ price of £8.10. But 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.

Which? also found the ‘regular’ Sainsbury’s price was much higher than at other supermarkets. At Asda, the same jar was £7, while at Morrisons, Ocado and Waitrose it was £6, £5.99 at Tesco and £5.49 at Lidl.

Which? has urged the regulator to properly scrutinise companies who use pricing tactics which make loyalty discounts look more attractive.

“It’s not surprising that shoppers are questioning whether supermarket loyalty card prices are really a good deal, as our investigation shows that up to a third of loyalty offers at Tesco and Sainsbury’s are not all they're cracked up to be,” said Sue Davies, Which? head of food policy.

“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. There is also the important issue of whether it is right for certain groups to be excluded from member-only schemes.”

The consumer champion called for changes to be made to the sector's ever-growing member-only pricing, its pricing practices and membership eligibility.

Reacting to the reports, Sainsbury's stated that the supermarket make "every effort to be transparent about how customer data is used at Nectar".

Tesco said all its Clubcard Price promotions followed strict rules, including looking at how they compared against prices at other supermarkets, to ensure they represented genuine value and savings.