Loyalty pricing in the groceries sector
The Competition and Markets Authority (CMA) reviewed loyalty pricing by supermarkets.
Administrative timetable
| Date | Action |
|---|---|
| 27 November 2024 | Findings published |
| 26 July 2024 | Update published |
| 30 January 2024 | Review opened |
Findings published
27 November 2024: The CMA has today published the findings from its review of loyalty pricing in the groceries sector.
Our review has found that shoppers who are members of a loyalty scheme can almost always make a genuine saving on the usual price by buying loyalty priced products. This should give shoppers confidence that they are not being treated unfairly.
Having analysed around 50,000 grocery products on a loyalty price promotion, the CMA found very little evidence of supermarkets inflating their ‘usual’ prices to make loyalty promotions seem like a better deal. In addition, shoppers without a loyalty scheme membership are generally paying the same price during the loyalty price promotion as they do in the weeks both before and after loyalty price promotions.
Our comparative price analysis indicates loyalty prices generally do offer shoppers savings when compared with the price of the same product at other supermarkets when it is not on promotion at the other retailers. But this is not always the case, and we found several loyalty priced products which were significantly more expensive than the cheapest price available at other supermarkets at that time, so there is value in shopping around.
Our report also summarises the key findings from our consumer survey in relation to shoppers’ attitudes to loyalty pricing and its impact on their behaviour.
We have carefully considered all information when coming to our conclusions. Our report sets out our views on the loyalty pricing practices we have seen. In chapter 6 of the report we outline our advice about how grocery retailers can stay on the right side of consumer law when offering loyalty price promotions.
Today we have written to all supermarkets that use loyalty pricing to advise them to review their practices in line with our advice and, where necessary, take action to ensure all of their promotions comply with consumer law, including when alternating between loyalty promotions and other forms of promotions such as was/now promotions.
We are also calling on supermarkets to consider if they could do more to make sure that certain shoppers – such as those without smartphones and under-18s – are able to join and make use of loyalty schemes.
The publication of the findings report concludes the CMA’s review of supermarkets’ loyalty pricing.
- Executive summary (27.11.24)
- Findings report (27.11.24)
- Appendix A: Consumer survey (27.11.24)
- Appendix B: Comparative pricing (27.11.24)
- Data tables (27.11.24)
- NatCen technical report (27.11.24)
- Press notice: Loyalty prices offer genuine savings, says CMA (27.11.24)
You can also read our blog on loyalty pricing: what shoppers and supermarkets need to know.
Update on our review – July 2024
26 July 2024: Since January 2024 the CMA has been undertaking a wide-ranging review into loyalty pricing in the groceries sector. A key focus to date has been on whether any aspect of loyalty pricing offered by some grocery retailers could mislead shoppers. It is vital that people can have confidence that advertised savings are genuine and are able to make properly informed choices when shopping, particularly in the context of continued cost-of-living pressures.
We have considered whether there are pricing practices that indicate that the non-loyalty (or non-member) price may have been artificially inflated to make the loyalty price appear misleadingly attractive. To do this we have gathered information from grocery retailers that offer loyalty pricing, and we are analysing, for example, what happens to prices before, during, and after a product goes onto a loyalty price promotion.
Our analysis – involving tens of thousands of loyalty price promotions – is ongoing, but the results to date suggest we are unlikely to identify widespread evidence of loyalty promotions that mislead shoppers in this way.
In our analysis we have seen examples of retailers alternating between ‘was/now’ promotions available to all shoppers and loyalty price promotions. This raises questions as to what the ‘regular’ price is for the product and therefore whether the claim saving for the ‘was /now’ promotion is genuine. We are looking further into this issue.
We are also comparing a sample of supermarkets’ loyalty prices to those prices charged by other supermarkets at the same time. Particularly given concerns raised by stakeholders, it is valuable for shoppers to have insight into how loyalty prices can compare with prices available elsewhere, including when they are on promotion at other retailers.
We have commissioned a consumer survey to understand the impact of loyalty pricing on how we shop, including how much people shop around and compare prices.
This survey is also exploring issues such as whether:
- loyalty pricing is affecting shoppers’ engagement with supermarket loyalty schemes
- shoppers’ trust that the price savings for members are genuine
- shoppers have concerns about supermarkets’ use of their personal data
- attitudes to loyalty pricing vary between different types of shoppers and if so how.
We will publish a report of our findings in November 2024. The report will also set out the CMA’s views on how retailers can stay on the right side of consumer law when offering loyalty price promotions, and when offering was/now promotions in close proximity to a loyalty price promotion.
Find out more about what we are doing to help people get a fair deal as they face the rising cost of living.
This update covers our recent work on road fuel prices, groceries, infant formula, vet services, online shopping and housing.
Summary
With the rise in some supermarkets making cheaper prices only available for loyalty card members, the CMA announced that it would begin a review of loyalty pricing by supermarkets in January 2024.
In line with that announcement, our review of loyalty pricing started this month. The review is part of a programme of work by the CMA to help tackle cost of living pressures in the groceries sector.
The review will consider issues such as whether:
- any aspects of loyalty pricing could mislead shoppers, for example whether the loyalty price is a genuine promotion or as good a deal as presented
- any groups of shoppers are disadvantaged by this type of promotional activity
- loyalty pricing is impacting consumer behaviour, and whether this has an impact on how supermarkets compete with each other
The review is at an early stage and we have not formed any views on the issues. We are now beginning our engagement with supermarkets. We will publish an update on our work in July 2024, and expect to complete our review by the end of the year.
Contact
Please send written representations about any competition or public interest to [email protected].
Updates to this page
Published 30 January 2024Last updated 27 November 2024 + show all updates
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Findings report published
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July 2024 update published
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First published.