The Competition and Markets Authority (CMA) today (27) declared that people who are members of a loyalty scheme can almost always make a genuine saving on the usual price by buying loyalty priced products.
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.
George Lusty, Interim Executive Director of Consumer Protection, said: "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. After analysing tens of thousands of products, 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.
"While these discounts are legitimate, our review has shown that loyalty prices aren’t always the cheapest option, so shopping around is still key. By checking a few shops, you can continue to stretch your hard-earned cash.
As part of the CMA’s work to help people facing cost of living pressures, it conducted a rigorous investigation of loyalty pricing. This sought to get to the bottom of a number of potential concerns, including whether loyalty prices can be trusted, how they compare to prices at other supermarkets and how accessible they are.
The CMA conducted a consumer survey to understand what shoppers specifically think about loyalty pricing, for example: do they trust it, do they think it’s fair, and does it change where people choose to shop. The CMA also examined supermarkets’ behaviour – including, importantly, their use of customers’ data.
The evidence shows that almost all products scrutinised – 92 per cent of around 50,000 items – offered a genuine saving against the ‘usual’ price in the same store. While loyalty prices are generally some of the cheapest available, this wasn’t always the case meaning it’s worth shopping around.
The survey also found that people can make an average saving of 17-25 per cent buying loyalty priced products at the 5 supermarkets examined: Tesco, Sainsbury’s, Waitrose, Co-op and Morrisons. 76 per cent of shoppers say loyalty pricing has not changed where they shop, but 24 per cent now compare prices more due to the introduction of loyalty pricing.
55 per cent of those surveyed think the price for non-members is inflated during loyalty price promotions while 43 per cent of those surveyed think it is unfair that loyalty scheme members pay lower prices for some products than those without a membership.
Another key finding of the survey was that people’s concerns about how their personal data is used is not stopping them from joining a loyalty scheme – only 7 per cent of those surveyed said they hadn’t signed up to a scheme due to personal data concerns. Some supermarkets could do more to make sure that certain shoppers – such as those without smart phones and the elderly – are able to join and make use of loyalty schemes
As part of its wide-ranging review, the CMA also looked at the way supermarkets collect and use people’s data when they sign up to a loyalty scheme. It did not see evidence of consumer law concerns in relation to this.
However, the CMA did find that there was room for improvement regarding people’s ability to access loyalty schemes.
Some supermarkets could do more to ensure people without smart phones or under 18s, for example, can access – and know how to access – loyalty prices. This could include introducing offline sign-up, in-store or via the telephone for example, and lowering the minimum age for joining a scheme.