Supermarket giants Tesco and Sainsbury’s are facing scrutiny over their loyalty offers as a new investigation by consumer watchdog Which? suggests that some of these promotions may not be as advantageous as they appear. Furthermore, the investigation reveals that some customers are being denied access to member discounts altogether, raising concerns about fairness in the grocery retail sector.
Which?, the renowned consumer champion, has shared its findings with the Competition and Markets Authority (CMA), urging them to investigate whether supermarkets are artificially inflating their ‘regular’ prices to make loyalty scheme discounts appear more substantial. This move comes as part of a broader inquiry into retailers’ increasing use of promotions linked to loyalty card schemes.
Which?’s investigation involved analysing 141 Clubcard and Nectar card prices at Tesco and Sainsbury’s, tracking their pricing history over the past six months. Shockingly, the report found that approximately one-third (29%) of member-only promotions were listed at their so-called ‘regular’ price, representing less than half of the six-month period.
One concerning example from the investigation was Sainsbury’s advertising a jar of Nescafé Gold Blend Instant Coffee (200g) for £6 with a Nectar card, claiming a saving of £2.10 from the ‘regular’ price of £8.10. However, it was revealed that the regular price had only recently been increased from £6, just two days before the Nectar price was introduced. This prompted questions about the legitimacy of such discounts, especially when compared to prices at other supermarkets.
The investigation also highlighted an issue related to the exclusivity of loyalty schemes. Not all customers are able to sign up for these programs, as they often come with age and address-based restrictions and digital requirements. This means that certain groups, including young parents, school children, and those in temporary accommodation, might be excluded from accessing lower prices that were once available to everyone.
While some shoppers are content with the loyalty card deals, others express concerns about potential price manipulation. One shopper told Which?, “I agree that these attract customers like me, but feel like they raise the prices anyway, and then members’ prices become the normal price it should be.”
In light of its findings, Which? is calling on supermarkets to ensure that their loyalty card prices are transparent and do not mislead consumers. They are also urging the regulator to closely examine this growing trend of dual pricing and consider the implications of excluding certain groups from member-only schemes.
Sue Davies, Which? Head of Food Policy, commented: “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.”
John Lewis Partnership Reports Improved Performance
In contrast to the supermarket sector’s concerns, the John Lewis Partnership reported improved financial performance for the half-year. Losses before tax and exceptional items decreased by 14%, and liquidity remained strong at £1.3 billion. The Partnership also reported an increase in customers and sales.
However, the economic outlook remains uncertain, and due to inflationary pressures, the Partnership Plan will take two additional years to deliver, extending to 2027/28 instead of the previously planned 2025/26. The plan emphasises productivity and efficiency.
Waitrose, a part of the John Lewis Partnership, saw sales increase by 4% to £3.7 billion, driven by price cuts and expanded collaborations with various partners. Meanwhile, John Lewis experienced mixed results with strong spending in beauty and fashion but caution in big-ticket home items and technology.
