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Once again, the grocery sector is coming under the spotlight. At a time when the UK’s inflation rate has started to slow a little, it still remains in double-digits with food prices rising to their highest since 1977[1].

Continual increases in grocery prices are undoubtedly a huge concern for consumers, as considerable amounts of the average household’s monthly income goes on food. Consumers are therefore facing stark choices between paying the increased costs or resorting to alternative ways of making ends meet (as demonstrated by the skyrocketing uptake in use of foodbanks across the UK) and the even more extreme “heat or eat” dilemma. And when they are at the shelf-edge, understanding which products are best value, and whether an offer truly represents a saving, may ultimately sway consumers one way or another in their purchasing decisions.

Against this backdrop, at the end of January, the Competition and Markets Authority (CMA) announced that it intends to investigate misleading grocery pricing practices in order help equip consumers with their purchasing decisions, in particular those which help consumers identify best value for money.

This isn’t the first time that grocers have come under CMA scrutiny. Back in 2015, the CMA looked into alleged misleading pricing and promotional practices in the grocery sector following a super-complaint from Which? The complaint covered special offers, approaches to unit pricing, pack sizing and price-matching. As regards unit pricing, the investigation discovered: (1) different interpretations of legibility of unit prices amongst retailers; (2) inconsistencies with how retailers present unit prices for similar products; and (3) inconsistencies with how retailers present unit prices for products on promotion. During the investigation the CMA concluded that there were some complexities and inconsistencies in approaches to unit pricing which may prevent consumers from identifying which deal gives them the best value and which may adversely affect their ability to make meaningful choices between products.

Ultimately the current law around unit pricing is largely regulated by the Price Marking Order 2004 and Weights & Measures Act 1985, with vendors also potentially being vulnerable of being found as misleading under the Consumer Protection from Unfair Trading Regulations – the consequences of such can include enforcement notices, unlimited fines and, in serious cases, imprisonment. The CMA now intends to investigate: (a) whether the unit pricing issues identified during the 2015 super-complaint persist; (b) whether there is compliance with consumer laws by retailers; and (c) consumer awareness around the use of unit pricing information and whether this continues to be a barrier to observing foods true value for money.

This investigation announcement comes only days after the CMA announced an investigation into greenwashing in the fast-moving consumer goods (FMCG) space (see Fighting climate change: David Attenborough, Greta Thunberg and….the CMA? (shoosmiths.co.uk)). Therefore, it appears that the CMA’s current focus and activity, consistent with their 2023-2024 draft plan, is in areas which carry great financial weight for consumers in everyday life, such as the food industry and FMCG space.

It is worth being mindful that during the course of the CMA’s investigation into the 2015 super-complaint, the CMA did flag that they had generally found that retailers had appropriate systems and policies in place to deliver compliance with the regulatory requirements. They also commented:

“However, our investigation has identified there is the potential for errors to occur and for incorrect units of measurement to be used for unit pricing in store, as well as problems with legibility. As before, we recommend that retailers do more to identify why compliance issues are arising and consider whether the balance of ex ante and ex post controls is optimal to identify all potential problems and further improve their consistency of compliance.”[2]

Therefore, the proposed investigation is not necessarily an indication that retailers are taking advantage of consumers but that they should consider where confusion may arise and take steps to address this as part of their policies and procedures.

So, will the CMA’s open investigations into the grocery sector, along with the FMCG space, be enough to give households that helping-hand in relation to making better value decisions and bringing down the cost of the weekly shop?  Given these projects are at their early stages, and further updates are not expected immediately, consumers perhaps shouldn’t expect them to make a significant difference to their bank balance in the immediate future.  However, with these projects underway, it may be enough to encourage retailers to examine their own practices to ensure that they are within the parameters of the relevant legislation and guidance to avoid any confusion by consumers and ultimately any heat from the CMA as part of their project.

 

https://www.gov.uk/government/news/cma-launches-grocery-unit-pricing-review-to-help-shoppers-spot-the-best-value-for-their-money

 

Resources

[1] UK inflation drops but food keeps inflation high - BBC News

[2] Para 1.26 of the CMA “Pricing Practices in the Groceries Market – response to a super-complaint made by Which? on 21 April 2015”

 

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