Supermarkets were today accused of a loyalty scheme scam designed to make savings look bigger than they really are.
Tesco and Sainsbury’s appear to be increasing the ‘regular’ price on household essentials before then offering what look like big reductions for those using loyalty cards.
Evidence uncovered by Which? covers a wide range of products from brands such as Nescafe, Heinz, Andrex, Persil, Cadbury, Quaker and Peroni.
Its findings – described by the group as amounting to ‘potentially dodgy tactics’ – have been reported to watchdogs at the Competition and Markets Authority, which is investigating supermarket prices.
The consumer champion analysed 141 Tesco Clubcard and Sainsbury’s Nectar card prices and tracked their pricing history back six months.
Which? analysed Sainsbury’s Nectar card prices and tracked pricing history back six months
Some 29 per cent were at their so-called ‘regular’ price, which is used as the benchmark for claimed savings, for less than 50 per cent of the six months.
Which’s findings on Sainsbury’s and Tesco’s loyalty card prices
HEINZ SALAD CREAM
‘Regular’ price increased just 22 days earlier
PERSIL 3 IN 1 NON-BIO
‘Regular’ price £10 just eight weeks earlier
BLUE DRAGON HOT SWEET CHILLI SAUCE
‘Regular’ price increased just eight days earlier
Only at ‘regular’ price for 16% of the past six months
ANDREX CLASSIC CLEAN (x9)
‘Regular’ price £5.75 just three weeks earlier
CADBURY DAIRY MILK (x4)
‘Regular’ price same as Nectar just a month earlier
NESCAFE GOLD BLEND
‘Regular’ price £1.10 more than any other supermarket
QUAKER OAT SO SIMPLE
‘Regular’ price the same as Nectar just 23 days earlier
Sainsbury’s advertised a jar of Nescafé Gold Blend Instant Coffee (200g) with a Nectar card price of £6 – a saving of £2.10 on the ‘regular’ price of £8.10. But the standard price had been £6 until shortly before the promotion.
Meanwhile, Tesco advertised Heinz Salad Cream (605g) with a Clubcard price of £3.50 and a ‘regular’ price of £3.90. However, its regular price had been £2.99 for several weeks before it was increased to £3.90.
A pack of Persil laundry pods was marketed by Tesco at a Clubcard price of £10.80 compared to a regular price of £12. However, Which? said the regular price had been even lower at £10 eight weeks earlier.
A pack of Jammie Dodgers biscuits was offered at a Clubcard price of 65p versus a regular price of 80p. However, Which? said the real regular price in previous months was 75p, which meant the saving was not as big as it appeared.
A multipack of four Cadbury Dairy Milk bars was marketed by Sainsbury’s at a Nectar card price of £1.50 versus a regular price of £1.65, but the same product had been sold at the offer price just one month before.
A pack of nine Andrex Classic Clean toilet rolls had a Nectar price of £5.25 versus a regular price of £6.25. However, the regular price had been £5.75 three weeks earlier, suggesting the saving was not as big as it appeared.
Which? also found that the regular prices quoted by Tesco and Sainsbury’s were often far higher than what other supermarkets charged for these same products.
Recent surveys by the organisation have found a collapse in shoppers’ trust in supermarkets with many believing they are prioritising protecting their profits.
It also found that many people are effectively excluded from joining the loyalty schemes.
This is because there are often age and address-based restrictions that mean vulnerable groups, such as young parents and carers, schoolchildren buying lunch and those in temporary accommodation could be denied membership.
Sue Davies, Which? head of food policy, said: ‘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.
‘As member-only pricing continues to grow, the sector, its pricing practices and who is eligible for membership needs to be properly scrutinised so that all shoppers – including society’s most vulnerable – can benefit and no one is misled into buying things they wouldn’t have usually bought or which isn’t quite the deal they believe it to be.’
She added that Which? was calling on supermarkets to ‘make sure that their loyalty card prices don’t mislead and for the regulator to look more closely at this growing trend towards dual pricing’.
Ms Davies continued: ‘There is also the important issue of whether it is right for certain groups to be excluded from member-only schemes.’
Which? pointed out that someone must be 18 or over to be a member of Asda, Iceland, Lidl, M&S, Sainsbury’s, Tesco, and Waitrose loyalty schemes, and 16 or over at Morrisons.
Co-op is the only major supermarket currently offering a scheme for under-16s, although Sainsbury’s does let under-18s collect points using a parent or guardian’s account.
Members must also be a UK resident to join the Iceland, M&S, Morrisons, Sainsbury’s, Tesco and Waitrose schemes. Some schemes also require an email address or the ability to download an app.
One shopper told Which?: ‘I don’t mind member-only pricing from a selfish point of view, but think it’s very discriminatory and morally questionable.’
Another said: ‘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.’
Tesco denied wrongdoing and said all its Clubcard Price promotions followed ‘strict rules’ which and pointed to Which’s own research that found it was cheapest major supermarket when a Clubcard was used.
A Tesco spokesperson said: ‘We know that having low prices on the products we sell is really important to our customers right now, which is why we have more than 8,000 weekly deals on Clubcard Prices, offering customers potential savings of up to £351 a year – all while collecting Clubcard points that can be put towards groceries and fuel, or doubled in value with our Reward Partners.
‘All our Clubcard Price promotions follow strict rules, including considering how they compare against prices in the market, to ensure they represent genuine value and savings for our Clubcard members. These rules have been endorsed by our Trading Standards Primary Authority.
‘As Which? reported recently, Tesco was the cheapest of all the major supermarkets when a Clubcard was used – and was extremely competitive when compared with the limited range discounters.’
According to Sainsbury’s, inflation meant many products had increased in price over the past six months and its own inflation rate has been behind many of its competitors.
A Sainsbury’s spokesperson said: ‘Nectar Prices offer our customers the opportunity to make genuine savings across 5,000 products.
‘Which? fails to recognise that base prices have been increasing throughout the year due to inflation. Our promotional rules around Nectar Prices are informed by the guidance from Trading Standards.
‘The Nescafe Gold example demonstrates Which?’s flawed methodology as the claim that the ‘regular’ price was £6 is untrue.
‘The base price of this item has been £8.10 since December 2022 and £6 was a promotional price throughout this year, including on Nectar Prices when it launched in April.’