Buying bigger packs of products including toilet roll, cheese, laundry detergent pods or discounted ketchup may not always mean shoppers get a better deal, according to a competition watchdog investigation of grocery prices.
The Competition and Markets Authority (CMA) said it had examined a basket of 26 items and found examples when shoppers had not got a better deal by relying on “rule of thumb” assumptions about what is best value in the first phase of an inquiry launched a year ago.
“While it was usual for bigger packs to have a lower unit price than smaller packs, this wasn’t always true. We saw examples in our basket of groceries of larger packs having higher unit prices,” the CMA said in its first release of analysis from its investigation.
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It found that while products on promotion were generally cheaper than those not, there were examples where discounted items “had an equal or more expensive unit price than alternative pack sizes which were not on promotion” including ketchup and laundry detergent packs. It also found examples where items in multipacks, including mayonnaise, were more expensive for each unit than other packs that were not on promotion.
“Our pricing analysis highlights the value of unit pricing when comparing between grocery items – revealing that shoppers’ commonly held assumptions about what products are cheapest on a per unit basis aren’t always right and that the pricing of some products relative to others can be surprising,” the CMA said.
The watchdog has called on supermarkets to make their prices clearer – laying out how much an item is per unit, such as per litre or kilogram, in a more consistent and legible way so that shoppers can know for sure if they are getting a better deal.
The government has said it will introduce new rules for clearer labelling on supermarket shelves – via an update to the price marking order – but the CMA said the legislation may take time to introduce.
The latest news on pricing comes as the CMA said it would examine whether retailer loyalty scheme discounts really offer a good deal and if they could disadvantage some groups of shoppers in an investigation that formally kicked off on Tuesday.
The CMA said in November it was to investigate schemes such as Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices amid concerns they could limit competition and stoke price rises for shoppers not signed up to such marketing schemes.
The schemes, which offer immediate discounts for loyalty cardholders, have been credited with helping Sainsbury’s and Tesco fight back against the discounters Aldi and Lidl in the last year.
On Tuesday, it emerged that Sainsbury’s was the fastest-growing of the traditional supermarkets and even outpaced Aldi in the three months to 21 January, according to Kantar. Sales at the UK’s second largest supermarket rose by 8.1% handing it a 15.7% share of the UK take-home grocery market, while Aldi’s sales rose by 7.2%. Tesco’s sales rose by 6.3%, taking its stake in the market to 27.6%.
Sainsbury’s began offering special discounts for its Nectar card holders and the Co-op brought in members’ pricing last year, and both have gradually ramped up their programmes.
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Tesco, which has the longest-running scheme, has increased the prevalence of its Clubcard discounts in the past year. Lidl launched a loyalty scheme in 2020 and updated it in 2022 so that shoppers had to spend more to get the top level of discounts.
The CMA said on Tuesday it had begun speaking to supermarkets about the subject and expected to release an update in July.
It said it had yet to form any views on the subject but would be investigating “whether any aspects of loyalty pricing could mislead shoppers,” including whether the discounts were “a genuine promotion or as good a deal as presented”.
Other topics it will look at include whether the schemes are affecting consumer behaviour in a way that could affect competition and if any groups of shoppers could be disadvantaged by the schemes.
The consumer group Which? said it had asked the regulator to look at whether supermarkets could be raising “regular” prices to make it appear that loyalty scheme customers are getting a better deal than they actually are.
