- Competition watchdog has ruled loyalty schemes do not inflate costs
British supermarket prices offered through loyalty schemes do provide genuine savings, the competition regulator has said.
Supermarket loyalty pricing has been reviewed by the Competition and Markets Authority over fears these schemes may have been ripping off shoppers.
Loyalty pricing discounts are seen by many as the ‘true’ cost of food, with the undiscounted price a steep mark-up for people not signed up.
The vast majority of UK shoppers now use these schemes, which cover an increasing number of products.
Loyalty schemes such as market leader Tesco’s Clubcard and Sainsbury’s Nectar offer significantly lower prices for members and have proved hugely successful for the UK’s biggest supermarkets.
And today the CMA said it had analysed around 50,000 grocery products on promotion and found very little evidence of supermarkets inflating their ‘usual’ prices to make loyalty promotions seem like a better deal.
The CMA found shoppers can make an average saving of 17 to 25 per cent buying loyalty priced products at the five supermarkets examined – Tesco, Sainsbury´s, Waitrose, Co-op and Morrisons.
‘We know many people don´t trust loyalty card prices, which is why we did a deep dive to get to the bottom of whether supermarkets were treating shoppers fairly,’ said George Lusty, CMA interim executive director of consumer protection.
‘We found that almost all the loyalty prices reviewed offered genuine savings against the usual price – a fact we hope reassures shoppers throughout the UK.’
However, Lusty did note that the CMA’s review had shown that loyalty prices were not always the cheapest option, and advised customers to shop around.
An investigation by consumer champion Which? has found a huge number of customers aren’t able to access those cheaper prices as they cannot sign up to loyalty schemes.
Millions of shoppers are excluded from signing up due to criteria often beyond their control – minimum age requirements, having a UK residency or address, and needing an email address or app.
Researchers found customers have to be over 18 to join schemes run by Lidl, Sainsbury’s, Tesco and Waitrose but only need to be 16 at Co-op and Morrisons.
Shoppers under 16 can sign up for a junior membership with Co-op or Sainsbury’s or be added to a parent or guardian’s account to access the cheaper price tier.
In July, the CMA said it did not expect to find widespread evidence of promotions that mislead consumers.
