The Competition and Markets Authority (CMA) announced today that it has started a review of loyalty pricing that several major supermarkets have introduced over the last couple of years.
The regulator had announced plans in November to examine schemes such as Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices amid concerns about the impact on consumers.
The CMA said today that its review will consider issues such as whether any aspects of loyalty pricing could mislead shoppers, e.g. is the loyalty price a genuine promotion or as good a deal as presented. It will also examine whether any groups of shoppers are disadvantaged by this type of promotional activity, and how loyalty pricing is impacting consumer behaviour and competition in the market.
The regulator revealed that it had begun talks with supermarkets and will publish an update on its work in July. It expects to finish the review by the end of the year.
Earlier this month, Simon Roberts, the Chief Executive of Sainsbury’s, defended its Nectar Prices discounts, saying: “We have very clear rules about what a price is, what it is before it comes down to being a Nectar Price, and we’re very consistent about how we do that.”
NAM Implications:
- ‘Concerns about the impact on consumers’
- This implies that anyone that cannot qualify for reduced prices is disadvantaged.
- But given that one of the oldest principles of selling has been:
- ‘Buy more and get a better price’ i.e. anything that could result in a lower cost of execution for the vendor, can be shared with the purchaser?
