The Competition and Markets Authority (CMA) has on Wednesday published an initial update on its ongoing work to tackle cost of living pressures in groceries with the publication of two reports: an assessment of retail competition in the groceries sector and a review of unit pricing practices across major retailers.
The watchdog has also written an open letter to grocery retailers on the use of unit pricing, calling on them to review their unit pricing practices in light of its report, which identified several practices that the CMA considered as problematic, likely to prevent consumers from making informed decisions when comparing products.
The CMA asked retailers to:
ensure that they unit price all their products of the same type using the same metric;
display the unit price of each product clearly next to the product and selling price in-store and online;
give unit prices for products on promotion for all types of promotions where this is feasible. For example, for price reductions, promotions where a loyalty price is presented alongside a standard selling price, and multi-buy promotions for products of the same price and size across both in-store and online;
review staff practices, procedures and training so that mistakes in unit price labelling do not occur.
“With so many people struggling to feed their families, it’s vital that we do everything we can to make sure people find the best prices easily. We’ve found that not all retailers are displaying prices as clearly as they should , which could be hampering people’s ability to compare product prices,” Sarah Cardell, CMA chief executive, said.
“We’re writing to these retailers and warning them to make the necessary changes or risk facing enforcement action. The law itself needs to be tightened here, so we are also calling on the government to bring in reforms.”
Over the past two months, the CMA has assessed how retail competition is working in the UK grocery sector, particularly between supermarkets such as Asda, Morrisons, Sainsbury’s and Tesco as well as discounters, including Aldi and Lidl. Looking at the effectiveness of retail competition across the market, this stage of the CMA’s review has focused on the extent to which rivalry between retailers ensures they keep their prices as low as possible and whether consumers can shop around to get the best deals.
Although food price inflation is at historically high levels, the CMA said evidence collected to date indicates that competition issues have not been driving this.
It noted that operating profits in the retail grocery sector fell by 41.5 per cent in 2022-23, compared with the previous year while average operating margins fell from 3.2 per cent to 1.8 per cent. This is due to retailers’ costs increasing faster than their revenues, indicating that rising costs have not been passed on in full to consumers, it said.
Consumers are shopping around to get the best deals has also restricted retailers’ ability to raise prices without losing business, it added.
The CMA said competition for individual product categories or across the wider grocery supply chain will be an important focus for the next phase of its work. It has identified ten product categories for further assessment, which are: baby formula, milk, bread, pet food, poultry, mayonnaise, baked beans, chilled desserts, ready meals, and lemonade.
“The overall evidence suggests a better picture than in the fuel market, with stronger price competition between all of the supermarkets and discounters. In the next phase of our work, we will examine competition and prices across the supply chain for the product categories we’ve identified. We’ll also continue to monitor the situation to ensure that competition remains effective as input costs start to fall,” Cardell said.
The review of unit pricing, which provides critical information to ensure people can compare prices effectively, looked at 11 supermarkets and 7 variety retailers.
Small stores (those with a retail floor space of not more than 280 square metres), including most convenience stores, have not formed part of the review as they are exempt from having to display unit pricing information.
The CMA has found compliance concerns with the Price Marking Order (PMO) amongst all those it reviewed, however for some retailers these were relatively minor. The CMA has identified that compliance is worse amongst some variety retailers.
The regulator noted that some of the problems stem from the unit pricing rules themselves, which allow unhelpful inconsistencies in retailers’ practices and leave too much scope for interpretation. As a result, shoppers may be finding it hard to spot and compare the best deals.
The CMA’s concerns relate to:
Consistency – different measurements are being used for similar types of products, making it hard for consumers to compare deals on a like-for-like basis. For example, tea bags being priced per 100 grams for some products and others being unit priced per each tea bag.
Transparency – missing or incorrectly calculated unit pricing information both in store and online. For example, 250ml handwash costing £1.19 but unit priced at £476.00 per 100ml and unit pricing information unavailable online until items were selected.
Legibility – unit pricing information being difficult to read, for example text on labels being too small or shelf edge labels being obscured by promotional information or by shop fittings.
Promotions – some retailers not displaying unit prices for any products on promotion.
In its report, the CMA has set out recommendations on the unit pricing rules and has called on the government to reform this legislation, to help shoppers spot the best deals. The CMA will publish the findings of its consumer research into the use of unit pricing in Autumn 2023.
ACS welcomes findings
The Association of Convenience Stores (ACS) has welcomed the CMA findings.
“This is a timely and important report that looks at the business costs and pressures that have driven inflation for consumers,” ACS chief executive James Lowman said.
“The UK has a highly competitive grocery market in which convenience stores play an important part, especially in rural and isolated communities. The conclusion that policy-makers should draw from this report is that the best way to promote lower prices for consumers is to help retail businesses to navigate a period when their costs are extraordinarily high.”
ACS has provided evidence to the CMA as part of their investigation, highlighting the significant cost increases facing convenience stores over the last year – most notably in energy costs, employment costs and wholesale product prices. The evidence notes that gross margins in convenience stores typically run at around 20-30 per cent depending on the product mix, with net margin being all but eroded for many businesses over the last year.
SPAR UK has announced the appointment of Michael Fletcher as its new managing director.
Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.
Since leaving Nisa, Fletcher has taken on several non-executive director and board advisory roles. He is also the founder and chief executive of Sleet Brush Limited, where he focuses on designing and implementing innovative solutions to complex retail and wholesale challenges.
“Michael has outstanding credentials in commercial, retail and FMCG sectors, with experience across various trading environments,” Nick Bunker, non-executive chair, SPAR Food Distributors Ltd, said.
“His professional capabilities and high standards consistently drive excellent business performance and operational resilience. We are delighted with his appointment and look forward his lasting and positive contribution to the SPAR business.”
Fletcher added: “SPAR is a globally recognised and respected brand, and I am thrilled to join the team. I look forward to supporting the ongoing strengthening and development of the SPAR proposition in the UK.”
Independent retailers are demanding tougher police action, more bobbies on the beat and harsher punishments as shoplifting levels reach an all-time high, a new survey reveals.
A whopping ninety-one per cent of respondents to a survey conducted by the Federation of Independent Retailers (the Fed) called for more police patrols on streets, while a similar number - 90 per cent - said that shoplifters should be handed harsher sentences.
Seven out of 10 respondents (72 per cent) said their stores had experienced shoplifting, break ins and damage to property, while they and their staff had been physically or verbally threatened.
Just under half of respondents (47 per cent) said they and their employees had been threatened or had suffered abuse and violence when asking for proof of age ahead of selling an age-restricted product.
Forty-four per cent reported that they and their staff had faced abuse or violence because they had refused to make a proxy sale – selling an age restricted product to a customer buying for a minor.
The results of the Fed’s survey came as new figures from the Office of National Statistics revealed that shoplifting was at a record high, with almost half a million offences recorded last year.
According to the ONS, 469,788 offences were logged by forces in the year to June 2024 – a 29 per cent increase on the previous 12 months.
The ONS added that this figure was the highest since records began – in March 2003.
“Inadequate responses from the police and a slap on the wrist for offenders means that shoplifting is soaring, and offenders are becoming more aggressive and brazen,” said Fed National President Mo Razzaq.
“From the responses we received, it is clear that real action is needed by police, by courts and by the government to stem the overwhelming tide of crime against retailers and their staff. Everyone deserves to feel safe at work and for their businesses to be protected against criminals.
“Fed members are also sending a clear message that one of the catalysts for verbal and physical abuse in stores is asking for proof of age before selling an age restricted product. If the government presses ahead with its plans to phase out smoking and vaping through a progressive ban to gradually end the sale of tobacco products across the country, independent retailers will be subject to even greater levels of violence, abuse and theft.”
Calling for action from the government and not just words, Mr Razzaq continued: “Without effective deterrent, criminals and opportunistic members of the public will continue to commit crimes.”
According to Ministry of Justice statistics, during the year to March 2024, 431 fines were handed out for retail theft under £100, while Home Office statistics for the same period show that 2,252 cautions were accepted for shoplifting.
PayPoint has announced a new partnership with Leeds Credit Union (‘LCU’), a financial cooperative with 37,000 members, enabling them access to its CashOut service, effective immediately.
The partnership will mean that LCU customers can access their cash and savings across any of PayPoint’s UK network of 29,000 retailer partners. This represents an unprecedented growth in accessibility and the first partnership of its kind for LCU. Historically customers have needed to visit one of LCU’s four branches to withdraw money.
Leeds Credit Union provides straightforward, affordable financial services. As a mutual there are no shareholders, so it is owned by its members and always has the interests of the members at the heart of everything it does. The credit union prides itself on providing members with the most appropriate services based on their circumstances.
“Our partnership with Leeds Credit Union will enable its customers to access their funds more easily than ever before," said Jo Toolan, Managing Director of Payments at PayPoint. "We’re committed to pursuing these kinds of partnerships, which enable credit unions to offer a more competitive and technologically advanced service, while simultaneously making the lives of customers that little bit easier through enhanced access.”
Greg Potter, Head of Marketing & Member Experience at Leeds Credit Union, said: “Increasingly, we’re looking at ways that we can apply technological solutions and partnerships to add value to the experience of our members using Leeds Credit Union. This partnership is demonstrative of our determination to grow in their best interests and will make access to funds something that can be done at any of a number of PayPoint locations in the UK.”
Keep ReadingShow less
A Philip Morris logo is pictured on a factory in Serrieres near Neuchatel, Switzerland December 8, 2017. REUTERS/Denis Balibouse/File Photo
Marlboro-maker Philip Morris said Tuesday it planned to close down its two production sites in Germany, citing falling demand for cigarettes among Europeans.
"In recent years, demand for cigarettes in Europe has fallen significantly," the company said in a statement, adding that it saw the same trend for roll-your-own tobacco.
"This trend is expected to continue in the coming years," the company said.
Many smokers have been shifting to e-cigarettes, or vapes, and heated-tobacco devices.
Philip Morris employs 372 workers at its factories in Berlin and Dresden. Both sites are scheduled for closure next year.
The tobacco giant said it would begin discussions with labour representatives to find "fair and socially responsible solutions" for staff.
Nisa retailer Prem Uthayakumaran has made significant donations totalling £3,500 to two local community organisations through Nisa’s Making a Difference Locally (MADL) charity.
The funds will provide essential support to groups within the communities that his stores serve, helping them continue their invaluable work.
The first of these generous donations was a £1,000 contribution from Broxbourne Service Station in Hertfordshire, directed to the Lea Valley Karate Academy. The funds will enable the academy to purchase much-needed equipment, ensuring that young people and adults in the local area have access to high-quality resources as they develop their skills in martial arts.
Additionally, a £2,500 donation was made by Eastfield and Cross Road Service Stations to the Mansfield Town Ability Counts Football Club. The club, which provides opportunities for individuals with disabilities to participate in football, will use the funds to support their programs, enhancing the experience for current players and making it possible for even more participants to join.
In July 2024, Prem donated £1,000 to Voice of the Vale – a group of young performers at Nottingham Trent University. This followed further self-donations from Prem to Broxbourne Organisation for Disabled and to Mansfield Under 12s Football Club in 2023.
Prem Uthayakumaran said: “Supporting the communities around my stores has always been important to me, and through Nisa’s Making a Difference Locally charity, we’re able to make a real, tangible difference. The Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club both play vital roles in their respective communities, and I’m thrilled to be able to contribute to their success.”
Nisa’s Making a Difference Locally charity enables retailers to donate to local good causes through the sale of Co-op own brand products in their stores. A percentage of sales from these products goes into a MADL fund, which retailers can then use to make donations to charities, schools, sports clubs, and other community groups.Kate Carroll, Head of Charity at Nisa, said, “We are delighted to see retailers like Prem using their MADL funds to support such worthwhile local causes. Both the Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club provide vital services to their communities, and donations like these enable them to continue their important work. At Nisa, we are incredibly proud of our retailers’ commitment to making a difference locally.”
Nisa’s Making a Difference Locally charity has been helping retailers like Prem Uthayakumaran give back to their communities for over 15 years, and with each donation, they help foster stronger, more Connected local areas.